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NSW invests $1.5bn in green hydrogen, driving low-carbon economy

6 Mar 2023

The government of New South Wales (NSW) in Australia has announced a $1.5 billion initiative to promote the growth of the green hydrogen industry. The NSW government plans to finance the development of green hydrogen hubs in Illawarra and Moree, and will provide concessions to large-scale green hydrogen producers. The move is part of the NSW Hydrogen Strategy, first announced in 2021, and aims to reduce the cost of green hydrogen by about 40% to less than $2.80 per kilogram by 2030, making it more globally competitive.

The $64 million funding will support the development of a 10 MW electrolyser in the Illawarra, with an annual green hydrogen production capacity of about 1,400 tonnes, and a 12 MW electrolyser near Moree. The Moree plant, to be located on Sundown Pastoral Company’s 65,000-hectare Keytah cotton farm, will convert green hydrogen and air-captured hydrogen into green ammonia for use as fertiliser on properties in the region. The 10 MW Illawarra project, being developed as part of BOC’s Illawarra Hydrogen Technology Hub, will produce four tonnes of green hydrogen daily to drive decarbonisation in the transport and industrial sectors.

BOC plans to expand electrolyser capacity to 650 MW to support decarbonisation of local steel, glass, and cement production and abate 716,514 tonnes of emissions by 2030. The incentives provided by the NSW government will be pivotal in helping the state scale up the emerging green hydrogen industry, securing its energy needs into the future while ensuring Australian industry can continue to compete on the global stage.

These incentives will help the state compete with the high-profile US Inflation Reduction Act hydrogen incentives, as the NSW concessions can apply to projects finishing well beyond 2030, while the US program finishes in 2032. Green hydrogen can drive deep decarbonisation in hard-to-abate market segments within the transport, industrial, and energy sectors, accounting for around 18% of NSW’s annual emissions. Providing these hard-to-abate sectors with a pathway to zero emissions is crucial to safeguarding their NSW business operations and employees, and setting them up to thrive in a global low-carbon economy.

The push to decarbonise the transport industry in NSW also reached a new milestone with the state’s first hydrogen-powered electric bus taking to the streets of the Central Coast in a local trial of the technology. The trial is an important milestone in plans to transition the state’s 8000-strong public transport fleet to zero-emissions technology by 2047 and will help evaluate how well hydrogen stacks up against electric as a clean energy technology.

The NSW government’s investment in green hydrogen will help the state transition to a low-carbon economy, securing its energy needs while reducing emissions in the transport and industrial sectors. The concessions provided to large-scale green hydrogen producers will help NSW compete with other countries in the growing green hydrogen industry. The developments in Illawarra and Moree will provide a solid foundation for the state’s green hydrogen industry, driving decarbonisation in hard-to-abate sectors while contributing to a more sustainable future.

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