Pure Hydrogen reckons budget sets Australia on the right track as world embraces revolution
Australia’s quest to be a ‘hydrogen superpower’ received an $8 billion nudge in the federal budget, but was it enough? We asked a major stakeholder.
The federal government will tip in nearly $23 billion to commercialise green technologies and speed up Australia’s journey to net zero – but is it enough?
Stockhead decided to get the lowdown from Pure Hydrogen (ASX:PH2) sales manager Clint Butler.
The global economy is facing its biggest transformation since the Industrial Revolution and to tackle it, Australia’s Albanese government has poured $22.7 billion into reshaping whole sectors around a mission of managing climate change.
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Under the banner of a “Future Made in Australia” – the country’s response to the US Inflation Reduction Act – this year’s federal budget includes an estimated $8 billion over 10 years from 2024 to support the production of renewable hydrogen.
The package includes a $6.7 billion hydrogen production tax incentive from ~2027 to 2040 to producers of renewable hydrogen and $1.3 billion over 10 years from 2024 to bridge the green premium for early mover hydrogen projects.
A cash injection of $17.1 million starting from this year for four years will be allocated towards key items under the National Hydrogen Strategy for things such as hydrogen infrastructure planning, social licence and industry safety training and regulation.
Could this package of incentives be the jump start the hydrogen industry needs to begin making real progress?
‘Positive start’
As an established first mover, clean energy company Pure Hydrogen is looking to make its mark on the industry with a staged, multichannel approach.
A key part of its long-term strategy is to develop the East Coast Hydrogen Superhighway, which will form Australia’s first network of clean fuel production facilities using emerald, turquoise and green hydrogen production capabilities to support hydrogen fuel cell (HFC) vehicles, currently unable to travel long-haul distances.
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It plans to set up numerous smaller operations such as its “green hydrogen micro hubs” to prove the technology and pair it with hydrogen appliances before gradually building towards larger-scale projects that can still be used domestically.
PH2 national sales manager Clint Butler said the budget measure was a positive start.
“We think the Australian government has a clear goal of turning the country into a superpower in hydrogen production and export supply and is trying to mirror what was done in the LNG industry,” he said.
“While the headline numbers for the 2027/28 Hydrogen Production Tax Incentive are large, what we are wary of are government funding initiatives that end up becoming a ‘handout to billionaires’ as we have seen so many times before for large-scale infrastructure projects.”
Chance to end dependency on overseas markets
Butler said that if Australia wanted to be seen as a country that could support others in their fight to reduce carbon, it needed to start in its own backyard and look after Australians.
“I think the production tax credit of $A2/kg for renewable H2 compared to the $US3/kg is off the mark – don’t get me wrong it will help, government funding is what is needed to push this industry out of the shadows and into the spotlight,” Butler said.
“In the past the talk was all about export and selling offshore – when that happens, the funding then goes to the companies that are not supporting Australia.
“We import our diesel/LPG and are held over the barrel with continuous price hikes.
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“PH2 can supply a fuel for Australia in Australia – there’s an opportunity here to stop being reliant on overseas markets and being dictated on what we pay for our fuel, but it will require policy decisions that really help to move the needle.”
PH2 has been pushing HFC vehicles via its 60 per cent owned subsidiary H-Drive International with three six-month trial commitments, as well as eight firm vehicle orders for delivery this year already in place.
“We have our sights on building the Australian Hydrogen Highway one step at a time – starting in the major east coast cities (most populated) and then join the dots between cities which will in-turn help the rural locations become involved that will then support our agricultural/mining industries with a clean future fuel,” Butler said/
“The banner is Future Made in Australia and PH2 is doing it for Australia.”
Room for improvement
While the budget sets us on the right track, Butler looks to the US where there are incentives for H2 and zero emission (ZE) vehicles from 50 per cent … and up to 80 per cent in some states.
“This is smart, if the world wants to combat climate change and reduce emissions, this is how it is going to happen,” he said.
“ZE vehicles are expensive compared to diesel vehicles but having the incentives in place definitely makes consumers who have started their journey to emission reduction get on the front foot.
“Australia still needs to adopt additional incentives for vehicles – government are very tight-lipped when it is spoken about but we need government to force the hand.
“Another idea could be to draw a circle around our major cities and say ‘from this date no more diesel trucks/buses/cars are allowed into the city’ – that could be a start.
“Consumers are hesitant to pay the high prices for ZE vehicles if they do not have to, but again, this forces the hand.
“I take my hat off to local councils who are adding into their waste collection contracts that contractors must show cause that they are adding ZE vehicles to their fleets if they are to win contracts,” he says.
“That’s a start but we think more dynamic policy can still be enacted at the federal government level to support the transition to ZE vehicle industries.”
This content first appeared on stockhead.com.au
At Stockhead we tell it like it is. While Pure Hydrogen is a Stockhead advertiser, it did not sponsor this article.
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