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Australia could become a green Hydrogen powerhouse – what companies will benefit?

Hydrogen can be produced in several ways. Green hydrogen is produced using electrolysers, powered by renewable energy, splitting water into hydrogen and oxygen.

Blue hydrogen is produced from coal or gas, with some carbon emissions trapped and stored underground. Grey hydrogen is the term used for when carbon capture and storage is used to capture carbon dioxide emissions during the production process.

A report released in 2021 noted Australia could create over 395,000 new jobs and generate AUD $89 billion in new trade by 2040 by investing in clean energy exports. The largest opportunities were in green hydrogen produced using renewable energy.

To reduce the cost of green hydrogen, it must be manufactured at scale, and there is now global impetus towards a green movement resulting in clean forms of energy and production becoming so competitive they displace incumbent fossil fuel industries.

Australian businessperson Andrew “Twiggy” Forrest is very much on board the Hydrogen express. This month he announced his company, Fortescue Future Industries, will build a green energy manufacturing centre in central Queensland. The first plank in a AUD $ 1 billion investment involving hydrogen electrolysers, before the project expands to other green industry products such as cabling and wind turbines.

FFI also plans to create a AUD $ 1.3 billion gas and hydrogen-fuelled plant at Port Kembla in New South Wales and a plant in Brisbane, producing green-ammonia for use in fertilisers.

Green hydrogen could revolutionise energy production, helping utilities run more flexible power grids while reducing fossil fuel emissions.

Beyond plans to sell electricity transmitted to energy-hungry Asian nations, Australia is looking to become a leading producer and exporter of green hydrogen by 2030. HyResource, a knowledge sharing-platform on Australia’s hydrogen industry, estimates that around AUD $1.5 billion has been pumped into clean hydrogen projects by Australian governments, industry, and research institutions over the past three years.

There are five operating projects with fourteen under construction or in advanced development and thirty-eight projects under development as of May, according to HyResource.

The first Australian major project is HyP SA that produces renewable hydrogen gas. Supported by the South Australian Government with grant funding of $4.9 million, the $14.5m HyP SA project is aligned to leverage the State’s wind, sun, land, infrastructure, and skills to be a world-class renewable hydrogen supplier and to reach net zero emissions by 2050.

At HyP SA, renewable hydrogen is produced using a 1.25MW Siemens Proton Exchange Membrane electrolyser with water and renewable electricity. The renewable hydrogen is blended with natural gas at volumes of up to 5% and supplied to nearby homes via the existing gas network.

HyP SA demonstrates renewable hydrogen production and blending technology in an Australian context and delivers a 5% hydrogen blend which is the first step to lowering greenhouse gas emissions. The project is currently extending the hydrogen footprint with projects to deliver up to 10% hydrogen blends before 100% conversion.

At the heart of the HyP SA facility, is a 1.25-megawatt (MW) Siemens Energy Proton Exchange Membrane (PEM) electrolyser that splits water into hydrogen and oxygen using renewable electricity, capable of producing up to 20 kg of hydrogen an hour.

This is the largest single electrolyser unit in operation in Australia today, although new projects in the development stage include electrolyser units or facilities at 10 MW or more.

PEM electrolysers are a potential solution to tackle the variable conditions by renewable energy generation, according to Siemens Energy. Electrolysers can ramp up when renewable electricity is abundant and switch off when demand is high. Integrating electrolysers into the electricity networks could also support energy stability.

Hydrogen Fuel cells

Hydrogen gas is highly flammable and can easily escape containment and if it does will easily corrode metals and make these contaminated metals brittle and prone to breaking.

Organizations using Hydrogen can either have hydrogen gas delivered to them via tube trailers for smaller quantities or if they need a higher quantity of fuel, they must build a plant onsite to generate hydrogen gas.

Setting up the infrastructure to use hydrogen fuel cells requires a large capital investment. Hydrogen fuel cells are more energy-efficient than internal combustion engines. However, lithium-ion batteries are still the most energy efficient and the highest performing energy source for forklifts

At its highest, fuel cell energy efficiency is around 60%. Typical internal combustion engines have 20-30% efficiency. Lithium-ion batteries have one of the highest CE ratings at 99%, while lead acid batteries are around 90%.

Fuel cells work like batteries, but they do not run down or need recharging. A fuel cell consists of two electrodes—a negative electrode (or anode) and a positive electrode (or cathode)—sandwiched around an electrolyte. A fuel, such as hydrogen, feeds to the anode, and air feeds to the cathode. In a hydrogen fuel cell, a catalyst at the anode separates hydrogen molecules into protons and electrons, which take different paths to the cathode.

The electrons go through an external circuit, creating a flow of electricity. The protons migrate through the electrolyte to the cathode, where they unite with oxygen and the electrons to produce water and heat

Germany and Australia working together on Hydrogen

In May 2021 The German government announced they will invest more than 8 billion euros to fund large-scale hydrogen projects.

The 62 German projects, supporting chemical, steel, and transport industries, are part of a joint European hydrogen project called Hydrogen-IPCEI, the ministries added. The 62 German projects, supporting chemical, steel, and transport industries, are part of a joint European hydrogen project called Hydrogen-IPCEI.

The projects were picked from a list of over 230 investment proposals, as part of the EU’s Important Projects of Common European Interest initiative. They include over 2 GW of electrolyser projects, representing 40% of Germany’s goal for electrolyser capacity by 2030, as well as 1,700 km of hydrogen pipelines, various projects to decarbonise the CO2 intensive steel industry and the development of hydrogen fuel cell systems and vehicles, as well as hydrogen refuelling infrastructure.

Germany is trying to accelerate its shift to clean energy after a landmark ruling last month from the country’s top court pushing for more ambitious CO2 reduction targets.

“We want to become the number one in the world in hydrogen technologies,” German federal economics minister Peter Altmaier said in 2021.

Australia’s National Hydrogen Strategy provides an overview of the vast potential for Australia to be a world-leading producer of clean hydrogen. The goal is ‘H2 under 2’ – that is to produce hydrogen at a cost of below A$2/kg.

Australia possesses major strategic assets for green Hydrogen production. Geoscience Australia has identified 873,000 km2 of land suitable for renewable hydrogen production in Australia – about 2.5 times the size of Germany. Australia also has significant solar capabilities, receiving 58 million petajoules of sunshine annually – that’s about 9,500 times more energy than the country uses together with good quality wind resources and an ecosystem of scientists, businesspeople, and government with deep skills in renewable energy and developing energy export industries.

In June 2021 Australian Prime Minister Scott Morrison and German Chancellor Angela Merkel announced the Australia-Germany Hydrogen Accord – a strategic initiative to deepen the collaboration on climate change action and emissions reduction.

The initiative’s ambition is to produce the cheapest green hydrogen in the world, which will transform entire industries, such as transport, mining, resources, and manufacturing.

The Australian Renewable Energy Agency (ARENA) will partner with Germany’s Federal Ministry of Education and Resources (BMBF) to administer the German-Australian Hydrogen Innovation and Technology incubator (HYGATE) and support pilots, trials, demonstrations, and research for hydrogen projects.

What Australian based companies are poised to benefit?

Environmental Clean Technologies (ASX: ECT)

The company is advancing green technologies for the energy and resource sectors, with two major hydrogen-related technologies currently under development.

HydroMOR is a low-cost, low emission, lignite-based, hydrogen-driven technology with an objective to enable low-value feedstocks to produce primary iron.

COHgen is a process aiming to deliver lower cost, lower emission method for hydrogen production from lignite (brown coal). The technology is advancing through fundamental lab development intended to form the basis for a patent application ahead of scale-up and commercialisation.

The company’s lignite drying process Coldry is also considered suitable to improve outcomes for downstream applications including hydrogen production and fertiliser manufacture.

Then in October, chairperson Jason Marinko, said “Our strategic review aims to leverage off the development work undertaken to date and target commercialisation opportunities for our unique technology in a market with increasing government and industry focus on net zero emissions,”

In November2021, the company announced details of a ground-breaking new project for deployment in the Latrobe Valley in Victoria, Australia., which will deliver clean hydrogen, agricultural char, and other valuable products with a zero-emission footprint.

ECT’s Coldry technology will form the core of the raw materials processing system, acting as the gateway enabler for an integrated operating plant. Coldry provides low cost, zero-emission dewatering and drying of incoming lignite and biomass streams, which will be fed into a thermochemical decarbonisation process creating two major product streams.

Underpinned by the proposed commercial-scale hydrogen refinery, the Project aims to establish a new regional hydrogen hub. The shares have been on the move this year powering up 145% in the 12 months to 13 December 2021.

Global Energy Ventures (ASX: GEV; FSE: WS9)

Global Energy Ventures is an energy transition company with a mission to deliver compressed shipping solutions for transporting energy to regional markets. The company’s business model is to build, own and operate the production, storage and shipping of and green hydrogen.

In 2020, GEV introduced the world’s first largescale c ompressed hydrogen ship and positioned the company as an early mover to fast track the marine transport of Hydrogen.

In December 2021, the company announced Capilano Maritime Design (Capilano) and Wärtsilä were jointly awarded the Contract Design Package for the compressed hydrogen ship. The next phase of development will build on the successful receipt of Approval in Principle in 2021.

It is estimated completion of the contract design package will allow GEV to advance discussions with shipyards for selection of the final design and construction partner. The design basis for the compressed hydrogen ship will be focussed on GEV’s 2.8 GW Tiwi Hydrogen Export Project requirements.

GEV considers the future of clean, zero-emission energy production is in green hydrogen and that Australia as the location of energy production will be divergent from the consumption (Asia and Europe) due to net zero commitments. The solution is a compressed hydrogen shipping solution (C-H2 Ship) which the company expects to build and commercialise over the next four to five years using its patented C-H2 Ship design. GEV’s C-H2 Ship is designed to carry 2,000 tonnes of ambient temperature hydrogen in 2 large 20 metre diameter tanks at an operating pressure of 3,600 psi. The hold tanks will be fabricated in layers with an inner liner to prevent the tiny hydrogen molecules entering the steel and weakening it. It is anticipated the C-H2 Ship will be powered by a Ballard Fuel Cell which would run from hydrogen pumped from the hold. This creates a zero-carbon shipping solution.

GEV is targeting final engineering and detailed design in Q3, 2022 which will run in parallel to a two-stage testing program to achieve Approval for Construction from American Bureau of Shipping (ABS) in 1H 2022.

The company's shares have moved up 45% to December 2021.

GEV's November 2021 investor presentation can be downloaded here.

Global Energy Ventures November 2021 presentation
Download PDF • 4.46MB

Hazer Group (ASX; HZR; FSE: 2H8)

Hazer Group Limited is a pioneering ASX-listed technology development company undertaking the commercialisation of the HAZER® Process, a low-emission hydrogen and graphite production process. The process enables the effective conversion of natural gas and similar feedstocks, into hydrogen and high-quality graphite, using iron ore as a process catalyst.

The patented process combines methane and unprocessed iron oxide to create hydrogen and a solid graphitic carbon.

The company is constructing a commercial demonstration project at the Western Australia Water Corporation’s Woodman Point Water Recovery Facility, which will use biogas (methane) captured from sewage waste received at the plant for conversion into the green gas.

The company recently announced in December 2021 there was a delay to the completion of the fabrication of the reactor for the Hazer Commercial Demonstration Project (CDP) and commissioning is now expected to occur in Q1 2022.

The technology has the ability to disrupt both the hydrogen and graphite markets. The Hazer process is a product of over 8 years of research and $6 million of research and development. The global strategy involves commecialisation of the process by building hydrogen and graphite plants and licensing the technology to end users and OEMs.

The Company’s December 2021 Presentation can be downloaded below.

Hazer December presentation 2021
Download PDF • 1.41MB

The company's shares have returned over 41% to the 12 month to December 2021.


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