The Australian government’s “hydrogen headstart” program, a $2 billion initiative to stimulate the renewable hydrogen industry and support flagship projects, has been backed by mining magnate Andrew “Twiggy” Forrest and other developers of large-scale renewable hydrogen projects in Australia.
The program will offer credits per kilogram of green hydrogen production, with the aim of bridging the commercial gap between production costs and current market prices. Hydrogen, which emits only water and burns cleanly, has the potential to substitute coal, natural gas, and oil in manufacturing processes, heating and power generation, and heavy transport.
However, the high cost of producing green hydrogen compared to hydrogen made from fossil fuels remains a significant barrier. The program has been welcomed as a “wonderful first step” by Forrest, who is leading a multibillion-dollar push to diversify iron ore giant Fortescue Metals Group into green hydrogen.
While details of the program’s final design are still being developed, Forrest stressed the importance of matching the US government’s tax credits of $US3 ($4.40) a kilogram. The program has been criticised by some coal miners for not focusing on all forms of hydrogen production, including those using coal, gas, and biomass.
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