The Federal Government this week committed some $1.1 billion in the upcoming May budget towards hydrogen, CCS/CCUS and international technology partnerships designed to drive investment in Australian projects and reduce the cost of low emissions technologies.
The funding comes from the 2021-22 Federal budget and broadly consists of:
- $275.5m for the development of four hydrogen hubs
- $263.7m for the development of CCS/CCUS projects
- $565.8m for international technology partnerships
The announcements builds on the $70m committed towards hydrogen and $50m towards CCS/CCUS in last year’s budget. Timed ahead of the upcoming climate summit with US president Joe Biden and in the context of increasing global pressure to move towards net-zero emissions, the announcements represent a step in the right direction for Australia.
We have summarised the spending breakdown below. Detailed information on the committed funds are expected to be released with the 2021-22 Budget in May this year.
Clean hydrogen ($275.5m)
The announced $275.5m will be used to accelerate the development of four additional clean hydrogen hubs (where producers and users are located in close proximity) in regional Australia, as well as to implement a clean hydrogen certification scheme.
The funding will likely be applied over a period of five years and includes $20m for up to 10 feasibility studies to determine the best locations for the hubs. The potential locations are in the Latrobe Valley (Victoria), Darwin (Northern Territory), the Pilbara (Western Australia), Gladstone (Queensland), the Hunter Valley (NSW), Bell Bay (Tasmania) and the Eyre Peninsula (South Australia).
The $263.7m funding continues the Government’s policy of exploring low emission technology in addition to 100% renewable projects. The funds will be used to support development of CCS/CCUS hubs and will likely be applied over a period of 10 years. It will explore potential sites in regions such as Moomba (SA), Gladstone (Queensland), the Darling Basin (NSW), the North West Shelf and Bonaparte Basin (WA) and Darwin (Northern Territory).
International technology partnerships ($563.8m)
In a separate announcement, $565.8m was also committed this week to back low-emissions international technology partnerships by co-funding research and demonstration projects. The Government is targeting $3 to $5 of co-investment for each dollar invested and noted that it is actively pursuing opportunities to collaborate with countries like Germany, Japan, Singapore, South Korea, the UK and USA.
By Alison Dodd (Partner), Nick Baker (Partner), Gerard Pike (Partner), Heidi Asten (Partner) and Frank Li (Solicitor).