Collaborating on renewable hydrogen, an Aus-Ger agreement
Australia-Germany deal
The two countries have signed an agreement to conduct a joint feasibility study, which ranges from production, transport, storage and the use of renewable hydrogen, investigating the supply chain of hydrogen produced from renewable energy between Australia and Germany.
The agreement aims to scope out the potential of exporting hydrogen from Australia to Europe; namely Germany. In light of the urgent concerns and efforts to lower carbon emissions, the countries are both developing renewable hydrogen as a clean source of energy.
According to Australia’s Minister of Resources, “Clean hydrogen is a transformational fuel that can be used to power vehicles, generate heat and electricity, and [used] as a chemical feedstock in major industrial applications.”
In its effort to establish itself as a powerhouse for hydrogen exports, Australia’s partnerships with Germany is the beginning of the “development of a strong and world-leading industry in Australia”.
In addition to its rather new partnership with Germany, Australia has existing green hydrogen partnerships with other countries namely; Japan, South Korea and Singapore sought through its hydrogen strategy.
The study, which was warmly welcomed and supported by Minister Birmingham, could lead to incredible export earnings for Australia, create jobs for the Australian people and help the country meet its future clean energy ambitions.
Hydrogen Economics
The EU’s goal to reach climate neutrality by 2050 would require decarbonisation of whole economies. Transport, cement and chemical sectors, which are difficult to electrify, could use a clean alternative, Hydrogen.
BloombergNEF explains that Hydrogen is a clean-burning molecule that can be used as a substitute for coal, oil and gas in a variety of applications and productions. However, it must be produced from clean sources for it to have net environmental benefits. Currently unabated fossil fuel processes are the usual method.
In a webinar hosted by EURACTIV, Dr. Dr. Hinrich Thölken, deputy director-general for energy and climate policy at the German Federal Foreign Office showed conviction in his views of green hydrogen playing a crucial role in achieving climate neutrality goals by 2050. Additionally, he spoke of the hydrogen economy. With the backdrop of failing, expensive and not green technology, costs and growing interest from policymakers, the hydrogen economy could soon emerge.
The European Commission created a strategy on developing hydrogen solely from renewables and to reach its goal by 2050, the EU is looking for ways of importing volumes of hydrogen that they themselves will not be able to produce. According to the strategy, hydrogen could meet about 24% of global energy demand and annual sales could be more than €600 billion.
Dr. Thölken acknowledged in his webinar commentary that there is not enough space in Germany for renewables to produce the amount of green hydrogen needed to decarbonise the country’s economy and to reach the EU’s goal of climate neutrality by 2050 — this underlines Germany’s partnership, and its importance, with Australia.
Strong winds of Change
As the price on renewables plummet, price competitive renewable hydrogen can be made and this is seen, by and large, as a revival of the hopes of the actualisation of a hydrogen economy. Since the Paris Agreement in 2015, new market opportunities for low emitting carbon technologies are opening up in light of international pressure to lower carbon emissions.
Australia is capitalising on the revived hopes for a hydrogen economy and it is using “all [its] ingredients” to be a powerhouse for hydrogen trade. According to its Chief Scientist, Dr. Alan Finkel, “the country’s extensive land availability, powerful solar radiation, stable diplomacy, strong winds” are what could make Australia a dominant leader in this industry.
Challenges
Despite the country’s strengths, the transportation, distance and costs of hydrogen trade with Germany and Europe may prove to be an insurmountable challenge. The distance between Australia and Germany could prove to be detrimental to its ambitions of establishing itself in the European market. Countries in North Africa, who are in close proximity to Europe could capitalise on the distance and grab the opportunity. However, Australia still stands positively, sentimentally and confidently in the memory of its “history of successful long-term supply agreements” which would make taking part in the European market a little less arduous.
Naturally, there is already research conducted on the transporting of hydrogen over long distances. The use of ammonia as a carrier is one solution to this problem. As hydrogen requires to be liquefied before it is transported, a huge expense, ammonia, on the other hand, is advantageous in that it can be liquified at low temperatures and traded easily. Hydrogen can be carried over long distances using ammonia but when it reaches its destination, it would need to be converted or transformed back into hydrogen which could add another expense and step to the supply chain process. Principal advisor to the European Commission on energy matters, Tudor Constantinescu, when speaking to EURACTIV said “at distances of more than 2,500 km it becomes maybe the preferred energy carrier to transport hydrogen- even more than pipelines”. Notwithstanding, Australia and Japan are looking into using ammonia as a way of shipping green hydrogen to Europe. Until this is however transposed, Australia may have to first make its mark as “the main supplier of hydrogen” to markets closer to home — Asian markets.
Certification
A reliable certification scheme is needed for the world’s importers to know whether their hydrogen was produced from fossil fuels or renewable electricity.
Europe has begun developing such a scheme an EU-wide guarantee of origin system called Certifhy and Australia has also proposed a certification scheme which is based on three elements: country origin, technology production and the amount of CO2 emissions that went into the production. This is vastly different from the EU scheme which, seemingly more objective, assigned colours to hydrogen depending on the manufacturing process: grey means the hydrogen comes from natural gas, green if it comes from renewable electricity, purple when it comes from nuclear and blue if it is from fossil fuels with carbon capture and storage.
Although different in motif and pertinence, talks were in motion with members of the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) to create a common digitised scheme that will be the understructure for a fair, objective and robust international hydrogen trade certification scheme.
At the end of the day, it is largely agreed that a liquid market is paramount to making hydrogen a global commodity.
References:
https://about.bnef.com/blog/hydrogen-economy-offers-promising-path-to-decarbonization/
https://arena.gov.au/blog/australia-and-germany-come-together-to-assess-hydrogen-supply-chain/
The full Joint Declaration of Intent with Germany: https://www.dfat.gov.au/international-relations/themes/climate-change/joint-declaration-intent-australian-german-supply-chain-feasibility-study-hydrogen-produced-renewables
