Victoria positions itself to become a global hydrogen leader

Articles Written by Martin Kudnig (Partner), Rick Ruffolo (Associate), Alanna Harrigan (Law Graduate)

In early February the Victorian Government announced that a new, $10 million hydrogen hub would be constructed in Melbourne’s south east.

The Swinburne University of Technology Hydrogen Hub (VH2) will provide a number of opportunities for students and researchers alike to further their understanding of hydrogen as a means of sustainable energy, as well as develop new technologies such as storage containers and clean energy vehicles.

Construction is set to commence in early 2022 and will take approximately 18 months to complete. A twin facility in Stuttgart, Germany is also expected to be constructed, resulting in Australia’s first international hydrogen development based partnership.

VH2 is estimated to create roughly 300 new full-time jobs. Additionally, 50% of the PhD and Masters scholarships in connection with the project will be awarded to women to boost female involvement in the sector.

The funding will enable the CSIRO to partner with Swinburne to not only support VH2, but to assist in the development of a refuelling station for hydrogen vehicles.

VH2 is a key element in the Government’s Renewable Hydrogen Industry Development Plan (the Plan), which details the method by which Victoria will establish a successful hydrogen economy over the next ten years. The Plan was released on 26 February.

The Plan is described as a “blueprint” for Victoria’s goal to bolster and lead the emerging hydrogen sector. The Plan is aligned with Australia’s other initiatives in supporting hydrogen production in Victoria, including the National Hydrogen Strategy and the overarching goal of net zero emissions by 2050.

The Plan sets out a “principles-based” approach with three main focus areas of creating a foundation for hydrogen development, connecting and stimulating the economy with hydrogen opportunities, and leading the way globally for the promising new industry. The Victorian Government has outlined overarching goals in establishing a hydrogen industry, including:

  • creating long-term jobs through new careers and skills;
  • exporting renewable energy;
  • driving innovation; and
  • reducing greenhouse gas emissions.

The Victorian Government announced another allocation of $10 million to “accelerate” Victoria’s hydrogen industry, including a $6.2 million grant  in support of renewable hydrogen “pilots, trials and demonstrations under the Accelerating Victoria’s Hydrogen Industry Program”, $0.5 million for the Australian Hydrogen Centre’s gas blending feasibility studies, and $1 million in support of “industrial users” (such as businesses and education providers) of hydrogen, among others.

Seven geographical areas are expected to benefit greatly from this emerging industry, namely Loddon Mallee, the Grampians, Barwon South West, Greater Melbourne/Port Phillip, Hume and Gippsland. It is also estimated that by 2050 there will be 7,600 new jobs created and $11 billion injected into the economy as a direct result of the developing hydrogen industry, which is particularly welcomed as Australia plans its economic recovery from the long-lasting effects of the Covid-19 pandemic.

The Victorian Government describes the advancement of the industry as “game-changing”, with the likelihood of huge demand in domestic and international markets.  Outside of the above domestic benefits, the Plan also outlines how opportunities within Victoria align with the National Hydrogen Strategy’s goal for Australia to become a major exporter of hydrogen. The Plan cites the world-first Hydrogen Energy Supply Chain (HESC) pilot project with the Japanese Government, which is jointly funded by the Commonwealth and Victorian Governments. This project allows Victoria to have “first mover” advantages in hydrogen supply chain development and will create infrastructure for the industry to further develop. The Plan cites several pre-existing deep-water ports with liquid fuel infrastructure that will be suitable for expanding the renewable hydrogen export market, including Portland, Geelong, Melbourne and Hastings. The Plan also cites other potential opportunities in Asia, including in The Republic of Korea.

The significant push indicates that Victoria (and Australia more broadly) is well positioned to become a leader in renewable energy storage and exports. Development of a new hydrogen standard is already underway, with Standards Australia having already created a new Technical Committee – ME-093 Hydrogen Technologies. The Victorian Government states that this new committee will “consider the technical properties of hydrogen and how it impacts safety”. We expect there to be significant developments to the “HyLaw” (Hydrogen Law) regulatory framework in the coming years.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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