MELBOURNE (Reuters) - Fortescue Metals Group <FMG.AX> will partner with Australia's national science body to support the development of an industry for hydrogen, a fuel which is being touted as the next big source of low-emissions energy.
Fortescue will fund Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) with A$20 million as part of a five-year agreement, Fortescue and CSIRO said in separate statements on Thursday.
Hydrogen has untapped energy potential without the downside of the carbon emissions from natural gas and coal, although it is not expected to be commercialised until the 2030s.
"We see potential for a significant export market in hydrogen and look forward to collaborating with third parties to ensure Australia's leadership in the new energy economy," said Fortescue Chairman Andrew Forrest.
The first technology to be supported will focus on a metal membrane using ammonia that could allow for cheap storage and transport of the notoriously expensive and hard-to-move gas. That could pave the way for its use as a low emissions fuel.
Australia, the world's biggest coal exporter and second-biggest liquefied natural gas (LNG) exporter, wants to build a hydrogen industry for export.
It is looking to supply what could be a $7 billion market for hydrogen to China, Japan, South Korea and Singapore by 2030, according to a report done for the Australian Renewable Energy Agency by consultants ACIL Allen.
The state of Western Australia last month launched a Renewable Hydrogen Council, including Woodside Petroleum <WPL.AX>, French power producer Engie SA <ENGIE.PA> and Norway's Yara International <YAR.OL>, to form a plan to use land, wind and solar resources to produce hydrogen.
(Reporting by Melanie Burton; Editing by Joseph Radford)
