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Australia will allocate A$2 billion ($1.4 billion) to support renewable hydrogen projects, as the major fossil fuel exporter attempts to reinvent itself as a clean energy powerhouse.
The funding, announced in the budget late Tuesday, will provide revenue support to private developers, with the aim of having two or three hydrogen projects up and running by 2030. The $1.4 billion figure is dwarfed by comparable spending measures in the US and Europe.
Developers are flocking to tap Australia’s rich wind and solar resources and large tracts of land for so-called green hydrogen, a carbon-free energy source tipped to play an important role in the global shift from fossil fuels. But while the nation has the biggest pipeline of announced green hydrogen projects in the world, so far few have reached financial close.
As countries compete for capital, investors and developers have said aggressive subsidies like the US Inflation Reduction Act — which provides $374 billion in funding for clean energy — will be needed to attract the vast investment required.
The new measures are a “great first step,” Fortescue Metals Group Ltd. said in a statement on Wednesday. The Australian iron ore miner has ambitions to become one of the world’s biggest green hydrogen producers and plans to reach final investment decisions on five projects around the world this year.
