August 31, 2023
Our submission to the Australian Government’s Review of the National Hydrogen Strategy has laid out evidence that real jobs that can be generated in coal communities when hydrogen projects are supported.
The Review of Australia’s National Hydrogen Strategy provides an opportunity to envision a more promising future for Australia’s energy regions. Australia enjoys numerous advantages for the development of a globally competitive hydrogen industry, including skilled and motivated workforces in key energy regions. But governments must act decisively to ensure opportunities do not pass us by.
Australia’s energy regions face a challenging future. Without careful planning and investment, coal power station closures are likely to devastate local communities and force a skilled energy workforce into unemployment. However, the development of Australia’s hydrogen industry has the potential to inject the new jobs and economic activity needed to successfully support energy regions through the transition.
Governments should actively incentivise and direct hydrogen investment into regions where coal generation is being phased out. This isn’t only about supporting communities who have powered Australia for generations. It’s also an eminently smart way to tap into an established energy-literate and experienced blue collar workforce, and exploit existing infrastructure in regions that are long-used to supporting heavy industries.
One proposed project has already recognised this. The Hydrogen Energy Supply Chain (HESC) Project successfully completed a pilot phase in the Latrobe Valley in early-2022 and, if progressed to commercialisation, would provide ongoing employment in the region of around 500 jobs, in addition to another 500 ongoing jobs in Hastings. This low-emissions hydrogen project utilises the Latrobe Valley’s coal resources to produce hydrogen (in a local gasification plant), which is then be liquefied in Hastings and shipped to Japan – a supply chain that was successfully demonstrated in the pilot phase.
The development of a new hydrogen industry will only fully deliver for Australian communities if the jobs created are well-paid, secure, and offer the protection of strong union representation. Workers displaced by coal-fired power station closures possess high energy literacy and transferable skillsets. However, if workers are financially disadvantaged for participating in training and reskilling courses, the hydrogen industry will miss out on this valuable workforce.
The development of a local hydrogen industry is an important opportunity to secure Australia’s place as a key player in a changing global economy. The Government should not impose barriers that could hamstring our pursuit of this opportunity. A ‘tech neutral’ approach is an intelligent, sensible approach that would give a new Australian hydrogen industry the best chance of succeeding.
It’s widely acknowledged that ‘green’ hydrogen is currently significantly more expensive to produce than other types of hydrogen, including coal to hydrogen projects. Australia must not risk waiting and should develop its hydrogen industry where it is affordable now, and where there are existing realistic proposals. The infrastructure that will be in place as a result can adapt as renewable hydrogen becomes more economic, but it has to be built first.
Foreign investment in our hydrogen industry is not surprising, as Australia is a key energy exporter for major Asian economies, including Japan and South Korea. They have a strong interest in the secure energy supply chain that Australia can continue to provide in a transitioning world. The HESC Project outlined within our submission has the backing of the Japanese Government, who this year committed $2.35bn to develop the project to commercial scale. This is an enormous investment in the Latrobe Valley community, and offers hope of a more positive future in the face of significant upheaval. It is in Australia’s interests to offer an investment environment that is facilitative and welcoming of foreign investment commitments from our most important export partners.