By Praveen Menon
SYDNEY (Reuters) – Australia will invest A$2 billion ($1.4 billion) to scale up development of its renewable hydrogen industry, the government announced in its annual budget on Tuesday, as it looks to accelerate clean energy projects in the country.
Funds will be allocated under a “Hydrogen Headstart” programme that provides revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts, the announcement said.
The government said the funds would help bridge the commercial gap for early projects and put Australia on course for up to a gigawatt of electrolyser capacity by 2030 through two to three flagship projects.
Australia already has the largest pipeline of renewable hydrogen projects in the world, Treasurer Jim Chalmers said, adding that getting to the country’s target of net zero emissions by 2050 will require renewable hydrogen.
“The government is making the biggest ever investment in Australia’s energy transformation,” Chalmers said in his speech.
Prime Minister Anthony Albanese’s government has also allocated about A$4 billion to renewable energy projects in the budget. It brings the total investment into renewable energy to more than A$40 billion, it said.
That includes part of the A$15 billion National Reconstruction Fund to support green industries.
The budget also allocated funds to the critical minerals industry needed to make batteries and other green technologies.
Supplier of nearly half of the world’s lithium, Australia is also the world’s third-largest cobalt exporter and a significant producer of rare earths, copper, graphite, manganese and other minerals key to the global energy transition.
However, those minerals are largely processed in China and turned into materials essential in batteries and magnets for products from electric vehicles to missiles.
The budget allocated A$57.1 million for a critical minerals programme aimed at drawing foreign investment into such projects in Australia.
($1 = 1.477 Australian dollars)
(Reporting by Praveen Menon; Editing by Sam Holmes)
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