A new report by PwC sets out the critical success factors for Australia to create the jobs of the future and new opportunities for regional Australia through the production of globally-competitive green hydrogen.
Getting H2 Right considers the critical success factors in order for Australia to service growing international and domestic markets: getting the price right, establishing infrastructure and supply chain, navigating policy and regulation, and making it bankable through partnerships.
“With abundant land and high-capacity factor renewable energy, Australia has the building blocks to produce globally-competitive clean hydrogen to service growing domestic and international markets,” said PwC Australia Integrated Infrastructure partner Lachy Haynes.
“For nations such as Japan and South Korea who want to reduce their emissions but don’t have the renewable energy capacity domestically to meet those needs, importing green hydrogen is an increasingly attractive opportunity.
“Other energy-rich nations are racing to capture this opportunity, so there’s no time to waste. We need a timely and robust regulatory framework that will give industry the confidence to develop the infrastructure, reputation, people and export pathways that will ensure we are globally competitive.”
Getting the price right
PwC Australia’s report reveals Australia’s forecast green hydrogen production costs will decline rapidly by 2040 and become the joint-lowest cost globally – on par with that of key export competitors.
“To drive down the cost of hydrogen production, the industry must focus on overcoming the cost of large-scale electrolysers while continuing to drive down the price of our internationally-competitive renewable energy,” said Haynes.
“Over the longer term, there is great potential for Australia to play a leading role in a globally traded hydrogen market.
“Australia must put this opportunity at the forefront to demonstrate its intent and conviction in a green hydrogen future, or risk innovation and investment being deployed elsewhere.”
With industrial-scale production set to target both the domestic and export markets over the coming decade, project developers have a number of critical considerations, including:
- Where to locate their hydrogen project;
- How to safely, efficiently and cost-effectively transport hydrogen molecules;
- Ensuring Australia’s ports have the required infrastructure available; and
- The form should the project take to satisfy customer demand.
According to PwC Australia’s report, transport costs from project to port can incur high costs and remove other cost advantages that the project may otherwise have had – and that Australia must invest in the infrastructure that will support hydrogen export.
The report also breaks down the options for the form of hydrogen when it is exported out of Australia, with pros and cons for the carriers, liquified hydrogen, ammonia and methylcyclohexane.
Navigating policy and regulation: the ‘soft’ infrastructure is the binding agreement to accelerate the uptake and growth of green hydrogen in Australia
PwC Australia’s report sets out four essential recommendations designed to underpin an effective, competitive, safe and sustainable transition.
“Beyond the physical infrastructure required across the renewable hydrogen value chain, it is the ‘soft’ infrastructure – in other words, the regulatory and social infrastructure – that is the binding ingredient to accelerate the uptake and growth of green hydrogen in Australia,” said Haynes.
PwC Australia’s recommendations are:
- Setting formal emissions targets to drive demand signals and attract investment;
- Developing a Guarantee of Origin scheme to provide transparency and consistency;
- Implementing safety standards to boost community confidence and social licence; and
- Establishing a skilled and capable workforce for the hydrogen transition.
According to PwC Australia’s analysis, there are more than 40 roles needed to support the Australian hydrogen economy, across six ‘occupational clusters’: engineers, technicians and tradespersons, safety and quality control, specialists, logistics and managers.
Making it bankable through partnerships
In order for 22 per cent of the world’s energy demands to be met by hydrogen, the Hydrogen Council estimates global investments of US$540 billion will be required by 2030 to meet 2050 global net zero goals.
“For investors, the complex supply chain considerations for hydrogen projects present more challenges than core infrastructure assets,” said Haynes.
“Many hydrogen export projects currently under development have formed consortia bringing together the requisite industry knowledge, skillsets and delivery capability.”
According to Getting H2 Right, partnering with a credible export party improves investor confidence, while offtake parties provide financiers with assurance over revenue, and strategic partners add value across the construction phase.
“There’s great potential for Australia to play a leading role in a globally-traded hydrogen market, but this success won’t happen by chance,” said Haynes.
“Australia must put the green hydrogen future at the forefront, or risk innovation and investment being deployed elsewhere.”
Year AUD cost per kilogram
2025 $5.70 – $6.10
2030 $4.10 – $4.50
2040 $2.00 – $2.45
2050 $1.65 – $2.05
