Australia’s Clean Energy Finance Corporation has been handed a new mandate to invest A$300 million ($192 million; €175 million) to support the development of the country’s hydrogen industry, including alongside private sector partners.
The Australian federal government today announced the launch of the Advancing Hydrogen Fund, as part of the CEFC’s latest mandate that came into effect in December 2019.
The money will be used “to support the growth of a clean, innovative, safe and competitive” hydrogen industry, according to a CEFC statement. An early priority is to invest in projects included in the ARENA Renewable Hydrogen Deployment Funding Round, a A$70 million grant program that aims to demonstrate the commercial viability of hydrogen production at large scale via electrolysis.
The Advancing Hydrogen Fund will draw on existing CEFC finance. CEFC said it will typically deploy at least A$10 million of capital in either debt or equity finance to eligible commercial and industrial projects, and the investments will include co-financiers or equity partners where possible.
The mandate also directs the CEFC to focus on projects that support the Australian government’s National Hydrogen Strategy, including the development of export and domestic hydrogen supply chains and the establishment of hydrogen hubs.
The CEFC finance will be available to fossil-fuelled hydrogen projects, not just those fuelled by renewable energy.
Hydrogen is currently used mainly for ammonia production in Australia, accounting for approximately 70 percent of total hydrogen use nationally. Ammonia production also accounts for almost 1 percent of total Australian greenhouse gas emissions.
CEFC CEO Ian Learmonth said in a statement: “Hydrogen has the potential to make a substantial contribution to our clean energy transition, reducing emissions across the economy while underpinning the development of an important domestic and export industry.
“Renewable hydrogen can enable the deep decarbonisation of notoriously difficult-to-abate sectors, particularly in transport and manufacturing, while accelerating the contribution of renewable energy across the economy,” he said.
“CEFC finance remains central to filling market gaps, whether driven by technology, development or commercial challenges. We are confident we can use our capital to help build investor confidence in the emerging hydrogen sector, which is an exciting extension of our investment focus.”
Energy minister Angus Taylor said the fund was one of the largest commitments to hydrogen production from any government in the world and that the industry’s potential “cannot be ignored”.
Separately, the CEFC has released a paper outlining how infrastructure has a critical role to play in helping Australia reach net zero carbon emissions.
The paper, Reshaping Infrastructure for a net zero emissions future, found that infrastructure accounts for 70 percent of Australia’s greenhouse gas emissions, including a direct effect on 15 percent of emissions and an indirect effect on 55 percent.
Despite this, emissions reductions are “not effectively prioritised in infrastructure planning, design, procurement and operations across sectors”, the report said. It also found that assets not prepared for a zero-emissions future were at risk of becoming stranded due to “significant and unanticipated losses of value”, and that unprepared assets will face restricted pools of financing.