The Federal Government has placed a $23bn tip on commercialising green technologies and speeding up Australia’s pathway to net zero – but is it enough? We get the lowdown from Pure Hydrogen 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 $22.7bn into reshaping whole sectors around a mission of managing climate change.

Under the banner of a ‘Future Made in Australia’ – the country’s response to the US Inflation Reduction Act – this year’s Federal Budget sees an estimated $8bn over 10 years from 2024 to support the production of renewable hydrogen.

The package includes a $6.7bn hydrogen production tax incentive from ~2027 to 2040 to producers of renewable hydrogen and $1.3bn over 10 years from 2024 to bridge the green premium for early mover hydrogen projects.

A cash injection of $17.1mn starting from this year for four years will be allocated towards key items under the National Hydrogen Strategy for things like 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?


Government funding needed to push industry ‘out of the shadows’

As an established first mover, clean energy company Pure Hydrogen (ASX:PH2) is looking to make its mark on the hydrogen industry with a staged, multi-channel 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.

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.

In an interview with Stockhead, PH2 national sales manager Clint Butler says the budget is 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 says.

“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.”


Opportunity to stop dependency on overseas markets

If Australia wants to be seen as a country that can support others in their fight against carbon reduction, it needs to start in its own backyard and look after Australians, Butler says.

“I think the production tax credit of AUD$2/kg for renewable H2 compared to the US$3/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.

“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. 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% 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 adds.

“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% and up to 80% 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 says.

“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,” Butler says.

“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.”



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