What is hydrogen and how can it support a low carbon future?

Hydrogen powered bus illustration

In late 2020, the Queensland government appointed its first dedicated Minister for Hydrogen, providing an indication of the key role the government expects hydrogen to play in both the local economy and as a major new export opportunity for Queensland.  But what is hydrogen, and why is it set to play such an important role in Australia’s future? 

Hydrogen – the Greek word for ‘water-former’ – is actually the most common element of them all. It’s the first element in the periodic table, the lightest and the simplest, made up of just one proton and one electron. 

Hydrogen is the energy that fuels our sun and all of the stars in the sky. But despite its abundance throughout the universe, hydrogen does not occur naturally on Earth in large quantities, and requires energy to produce here. 

How is hydrogen produced?

On Earth, hydrogen is most commonly found in water – H2O, the chemical formula for water, literally represents two hydrogen atoms and one oxygen atom – but it can also be found in fossil fuels like natural gas, coal and petroleum. 

There are three main ways to produce hydrogen, usually referred to by a simple colour code. 

  • Brown hydrogen is produced using fossil fuels, with the resulting emissions released into the atmosphere. This is currently the most common form of hydrogen production.
  • Blue hydrogen is also produced using fossil fuels, but the resulting emissions are neutralised through the use of carbon capture and storage technology. 
  • Green hydrogen is produced from water using renewable energy via a process called electrolysis. 

While brown hydrogen is a significant source of carbon emissions, responsible for worldwide CO2 emissions equivalent to the United Kingdom and Indonesia combined, blue hydrogen and green hydrogen are carbon neutral, and have both been described as clean hydrogen. 

Watch now: Types of hydrogen

Electrolysis, the method used to produce green hydrogen, involves a strong electrical current – generated from renewable sources like solar or wind energy – being passed through purified water. The electric current splits the water into its constituent elements, hydrogen and oxygen. 

Hydrogen can be used immediately, but it can also be stored in tanks for later use. 

Hydrogen is large in volume – nearly four times as large as natural gas – but it can be compressed, liquefied or converted into ammonia for transport. 

What can hydrogen be used for? 

When hydrogen reacts with oxygen in the air, it generates heat energy. This energy is literally rocket fuel – NASA has used hydrogen to deliver its crews and cargo to space – but it also has a variety of applications here on Earth. 

The CSIRO’s National Hydrogen Roadmap, released in 2018, outlined several applications for hydrogen, including: 

  • Powering fuel cell vehicles. A fuel cell is an electrochemical cell that converts the chemical energy of a fuel (in this case, hydrogen) and an oxidising agent (oxygen) into electricity. While hydrogen fuel cells are still uncommon in commercial passenger cars, they’ve been used to power buses, trucks and trains overseas, and are beginning to be rolled out on Australian public transport
  • Powering container ships that run on liquid ammonia made from hydrogen. 
  • Powering refineries and other industrial facilities in place of coal, helping to reduce emissions in energy-intensive industries.
  • Supplementing the domestic natural gas supply. Hydrogen can be fed through gas turbines to generate electricity. 
  • Stabilising the electricity grid. Electrolysers – the devices that split water into hydrogen and oxygen – can ramp their production up and down to supplement the variable output of renewable energy sources like wind and solar, ensuring the electricity supply at times of peak demand. 

What role will hydrogen play in Australia’s future? 

With our wide brown land and our abundance of sunshine and wind, giving us both the space and the resources required to generate clean energy on an industrial scale, Australia has the potential to become a world leader in producing green hydrogen – and there are plans afoot to make the most of it. 

Following the release of the CSIRO’s aforementioned National Hydrogen Roadmap in 2018, and an ARENA report that same year that found hydrogen exports could be worth up to $10 billion each year to the Australian economy by 2040, the nation’s energy ministers released the National Hydrogen Strategy in 2019. 

The strategy includes the development of an international Guarantee of Origin hydrogen certification scheme, which will be trialled this year. Funding for the trial will come from the $275.5 million investment in building the hydrogen industry announced as part of this year’s Federal Budget, which will also support the creation of ‘hydrogen hubs’ in regional Australia. 

The strategy is also expected to involve the completion of a National Hydrogen Infrastructure Assessment; the eventual release of an annual State of Hydrogen report; a review of Australia’s legal frameworks to support the safety and development of the hydrogen industry; and the possible addition of hydrogen to gas networks. 

Queensland has its own Hydrogen Industry Strategy 2019-2024, which includes a Hydrogen Industry Development Fund to drive investment and accelerate development of hydrogen projects. The Queensland Government has committed a total of $25 million to the development of the hydrogen industry so far. 

It’s not a done deal – green hydrogen still costs between $6 and $9 per kilogram to produce, well above the $2 per kilogram stretch goal set in the Federal Government’s Low Emissions Technology Statement last year. But with projected reductions to the cost of both the electrolysers needed to produce hydrogen and the renewable energy needed to power them, green hydrogen should gradually become more commercially viable. 

In 2020, Stanwell – with the support of ARENA – conducted a concept study that looked at the potential for developing a large-scale green hydrogen industry in Central Queensland.

The study found that Central Queensland’s high quality renewable energy resources, available land and water, and access to major port infrastructure make it an ideal location for establishing a large-scale hydrogen industry, but there is still some way to go before green hydrogen will be commercial. 

In the meantime, Stanwell is continuing to work with Japan’s largest hydrogen supplier, Iwatani Corporation, to establish an international consortium to help develop large-scale green hydrogen production in Central Queensland. The goal of the project is to export hydrogen to Japan, where demand for imported green hydrogen is expected to be strong. 

Once again, hydrogen could serve as rocket fuel – but this time, for our economy.