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A clean future or merely greenwashing? Critics claim Coalition's hydrogen plans are a 'fig leaf' for fossil fuels

By energy reporter Daniel Mercer
There are hopes hydrogen can reduce industrial emissions, but observers say it could go either way. (ABC Graphics: Cordelia Brown )

Plans by the federal government to develop a "clean" hydrogen industry in Australia have been branded greenwashing by critics who say taxpayer money is being used to subsidise fossil fuel activities. 

The government has announced plans for a series of hydrogen hubs around the country as part of efforts to kickstart production of the fuel and decarbonise the economy.

About $500 million has been earmarked for hydrogen hubs for industrial centres in places including Western Australia, the Northern Territory, Queensland and Tasmania.

But the spending has drawn fire amid claims much of the money would be invested in so-called blue hydrogen, which is made using natural gas rather than renewable energy.

The Australia Institute, a left-leaning think-tank, argued the funding defeated the purpose of building a hydrogen industry.

The institute's climate and energy program director, Richie Merzian, said clean hydrogen could "be one of two things".

"You can make it using renewable energy, which is a zero-emissions process," Mr Merzian said.

Renewable energy advocates insist sources such as solar power must be used to make hydrogen. (ABC Rural: Landline)

'Might as well use the fossil fuels'

Climate Energy Finance director Tim Buckley backed the concept behind hydrogen hubs, which were aimed at putting producers of the fuel alongside big users such as industrial customers.

But Mr Buckley described as greenwashing the government's support for blue hydrogen, which he said was a "fig leaf" to hide the continuation of the natural gas industry.

The former investment banker said producing hydrogen from gas instead of renewable energy made no sense.

"At the end of the day, if you are going to make hydrogen from fossil fuels, you might as well just use the fossil fuels," Mr Buckley said.

"Why go through the extra processing steps, the extra cost, to use hydrogen?

As well as providing financial support for blue hydrogen, the Coalition has also thrown its weight behind carbon capture and storage projects around the country.

Cutting emissions the goal: Taylor

Federal Energy Minister Angus Taylor said the technology would be vital if Australia — and the world more broadly — were to become carbon neutral in the coming decades.

Mr Taylor said carban capture and storage had the backing of the International Energy Agency and the Intergovernmental Panel on Climate Change, noting there were "just under 30 projects in production" worldwide.

Federal Energy Minister Angus Taylor says every technology should be available to decarbonise the economy. (ABC News: Toby Hunt)

He also defended the government's support of blue hydrogen prospects, insisting the process could help reduce Australia’s emissions.

"You've got to remember the objective of the exercise here is to reduce emissions, not destroy industries," Mr Taylor said.

"Now it is true there are activists out there that would like to destroy our traditional industries, whether it's agriculture, resources.

Mr Buckley said the fact that blue hydrogen relied on burying carbon emissions underground should be a red flag for government.

He claimed the technology had failed despite decades of trying by industry, and pointed to the problems that had plagued the carbon capture storage project at the $US54 billion Gorgon gas project off WA's north-west coast.

Setbacks have plagued carbon capture and storage efforts at the $US54 billion Gorgon LNG plant. (Supplied: Chevron)

Carbon capture a 'dud' technology

Mr Buckley said it made no sense to be talking about blue hydrogen given commercial-scale deployment of carbon capture and storage had not actually worked.

"The government and the fossil fuel industry has been so effective at undermining the key enabler of carbon capture and storage, which is a carbon price," Mr Buckley said.

Mr Merzian agreed and also took aim at government assistance for a number of carbon capture and utilisation — otherwise known as enhanced oil recovery — projects in which carbon is pumped into reservoirs to extract more oil and gas.

He said such support, along with money for blue hydrogen and carbon capture storage, amounted to the subsidisation of the oil and gas industry by taxpayers.

At the same time, he said, oil and gas producers around the world were posting multi-billion-dollar profits as energy prices soared to all-time highs.

Hydrogen production 'must be green'

"Going down the pathway of fossil-fuel-based hydrogen is really dangerous because it's unlikely you're going to bury those emissions and you might just end up with more," Mr Merzian said.

Richie Merzian is the director of climate and energy at the Australia Institute. (ABC News: Isabella Higgins)

He said its only benefit was in "pretending we can continue to use fossil fuels in the hope that somehow we will be able to bury the problem".

"It makes it all the more ridiculous when you have an actual opportunity to invest in a zero-emissions production process for hydrogen and it's available right now," he said.

Mr Taylor dismissed the criticisms and said the government wanted to keep its options open as the country moved towards net zero by 2050.

He said "every technology that's available should be in the mix" and highlighted how the government was spending $22 billion on different solutions to cut Australia's carbon output.

"There are some who would like the portfolio to be a minimal set of technologies and in the process destroy traditional industries," Mr Taylor said.

He said the government was focused on having the broadest range of technologies available.

"Our focus is on the projects, not the companies."

Natural gas a 'pathway' forward

Australian Petroleum Production and Exploration Association deputy chief executive Damian Dwyer said the industry was committed to reaching carbon neutrality by 2050 and noted it had already spent $5 billion on decarbonisation initiatives.

Mr Dwyer said technologies such as carbon capture and storage would be "critically important" in helping Australia meet its goals.

The Coalition is backing projects to produce so-called blue hydrogen from natural gas. (Bilfinger SE/flickr.com)

He said Australia was particularly well-placed to use carbon capture storage, suggesting the country had "known high-quality, stable geological storage basins, existing infrastructure, world-class technical expertise and regulatory regimes".

"In a similar way, natural gas is a pathway to a large-scale and innovative commercial hydrogen industry," Mr Dwyer said.

He said Australia's upstream oil and gas industry was well placed to assist in the development of a large-scale and innovative commercial hydrogen industry.

The Suiso Frontier earlier this year transported the world's first shipment of hydrogen, made from coal. (Supplied: HESC project )
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Dive Deeper:
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Get all your news in one place