Australia is boosting hydrogen exports to EU as part of green push

Australia wants to boost exports of green hydrogen to the European Union as the bloc seeks to cut emissions in its most energy-intensive sectors.

“Australia can be a renewable energy export superpower and Europe is energy hungry,” Chris Bowen, Australia’s climate and energy minister, told Bloomberg TV. “Australia is 100% all in with Europe in this transition.”

The EU has set itself ambitious goals to scale up output of hydrogen made using renewable technologies such as wind and solar — aiming to produce 10 million tons by 2030 — but will also need to import the same amount from abroad. The bloc has already struck agreements with nations like Egypt and Namibia to help supply some of it.

At the same time, Europe has been tapping alternative energy sources from around the world to make up for the shortfall in Russian pipeline gas since the invasion of Ukraine.

Bowen rejected suggestions that shipping hydrogen to the other side of the world would make it economically unviable, saying that the main costs are associated with producing the fuel and loading it on ships. He said Australia coal industry has proved that the country is capable of transporting energy over long distances.

“Transport costs of green hydrogen aren’t the problem,” Bowen said. “Once we’ve made the green hydrogen and got it on a ship, it doesn’t really make that much difference if we send it from Sydney to Auckland, or from Darwin to Rotterdam.”

The minister on Monday signed a memorandum of understanding with the Netherlands to promote green hydrogen supply chains. A deal was also signed with Germany to fund projects for the fuel.

Bowen also said that he had talked to EU officials about the bloc’s plans for a carbon border adjustment mechanism, a levy due to start later this year. He said he hoped to minimize its impact on Australia and that Europe’s trade dispute with the US over the Inflation Reduction Act can also be resolved. 

Australia’s free trade agreement meant it had received “significant concessions” from the US in battery and electric vehicle manufacturing, Bowen said.