Regional Australia to be promised clean energy jobs boom

Regional Australia will be promised a jobs boom from clean energy in a looming federal climate policy that lifts spending on hydrogen projects in a bid to cut greenhouse gas emissions to net zero by 2050.

The federal government is naming Queensland as a big winner from the hydrogen plan as Prime Minister Scott Morrison seeks to overcome concerns from the Nationals about the impact of a bigger climate target on voters outside the big cities.

Energy Minister Angus Taylor plans to use his visit to the United Nations climate summit in Glasgow next month to talk to counterparts from other countries about investing in Australian hydrogen exports.Credit:Alex Ellinghausen

With Nationals leader Barnaby Joyce demanding a deal for the regions, Mr Morrison will debate the climate plan with cabinet ministers on Wednesday ahead of meetings with backbenchers to decide the final policy early next week.

But the environmental movement is warning against any plan that claims to produce “clean” hydrogen from domestic gas, saying it will be shunned by customers in favour of hydrogen produced from solar and wind power.

The hydrogen plan is emerging as a key pledge to calm fears among the Nationals about the damage to coal and gas exporters from the 2050 goal and any move to increase Australia’s emissions target for 2030.

Energy Minister Angus Taylor plans to use his visit to the United Nations climate summit in Glasgow next month to talk to counterparts from other countries about investing in Australian hydrogen exports in the same way they backed the gas industry over decades.

“This is a very live set of discussions that are happening now,” he said on Tuesday of those global talks. “This is a huge opportunity for Australia, a very big opportunity for Queensland and one I’m very excited about.”

The government has announced $464 million for a series of hydrogen “hubs” that could be built in Gladstone in Queensland, the Hunter Valley in NSW, the Latrobe Valley in Victoria and Bell Bay in Tasmania to produce energy that could be exported similarly to liquefied natural gas.

Mr Taylor is identifying other locations for projects in key parts of Queensland where the Liberals and Nationals want to shore up support at the next federal election, including Mackay, Toowoomba and Townsville.

“It has been easy to say that the LNG industry has no role in the future of our energy system or energy systems around the world, but this is wrong,” Mr Taylor told a business forum on Tuesday.

“This is still a hugely important fuel source, not only for the direct supply of natural gas into customer markets but also in the role that it can play in decarbonising through the production of ammonia and hydrogen.

“Queensland’s gas supply, and the industry around that, will continue to be a very, very important one for many, many years to come.”

Fortescue Metals Group chairman Andrew Forrest announced $114 million last Sunday for a Gladstone project to produce hydrogen equipment, in a plan backed by Queensland Premier Annastacia Palaszczuk. He is also supporting a power station at Port Kembla in NSW that aims to produce electricity from hydrogen, although it will also use LNG in its early stages.

Greens leader Adam Bandt slammed the idea of giving the gas industry a pathway to producing hydrogen in the government’s updated technology investment road map, which is part of the climate policy package expected next week.

“Gas is as dirty as coal, so there’s a future for Australia in green hydrogen, which is produced from energy from the sun and the wind, but not hydrogen produced from gas and coal.

“There’s no need for more gas and it’s actively more harmful.

“And other countries won’t want to buy hydrogen produced from gas and coal – they’ll want green hydrogen. It’s not only going to make the climate crisis worse but it will leave us with stranded assets.”

The gas industry is urging more support for “blue” hydrogen produced from gas, citing research from consulting firm EnergyQuest about the low cost of this form of hydrogen compared to the same product generated by electrolysis powered by wind and solar electricity.

“The greatest near-term potential for decarbonisation lies in blue hydrogen (hydrogen produced from natural gas with carbon capture and storage), rather than the much more expensive green hydrogen. Natural gas has a critical role to play in decarbonisation of the energy system,” EnergyQuest said in August.

The government climate policy aims to cut the cost of hydrogen to $2 a kilogram so it is competitive with fossil fuels, but there are questions about whether this price can be achieved with solar and wind power when it is already possible for “blue” hydrogen from gas.

Australian National University researchers Thomas Longden, Fiona Beck and Frank Jotzo warned of the costs of “blue” hydrogen in a paper in March that said it would produce a lot of carbon emissions.

“At the moment, producing hydrogen with fossil fuels generally costs less than producing it with renewables-powered electrolysis. But the cost of electrolysis with renewable energy is falling, and could become cheaper than fossil fuel with carbon-capture options,” they said.

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