Australia aims to become a global leader in the future green hydrogen economy, thanks to its abundant renewable energy resources and proximity to energy-hungry markets. Positioned as a key driver of the nation’s transition to a low-carbon future, green hydrogen — produced using renewable energy to split water into hydrogen and oxygen — offers transformative potential for economic growth, energy security and sustainability.
Dr Daniel Schepis, a graduate (BCom (Hons) '09, PhD '14) and senior lecturer in Marketing at the UWA Business School, sees this future market as having wide-ranging potential, largely dependent on the current actions of government and industry leaders.
“Australia, like many nations, is racing to decarbonise and reach its net-zero targets. Green hydrogen has gained significant attention as a potential solution, especially for hard-to-abate industries and for energy storage and transport,” he said.
Green hydrogen shows great promise as a clean alternative to fossil fuels for hard-to-abate sectors such as steelmaking, shipping and aviation. It also offers the ability to serve as a storage medium for renewable energy, addressing the intermittent nature of solar and wind power. It’s believed that, by integrating green hydrogen into its energy portfolio, Australia can significantly reduce greenhouse gas emissions and meet its ambitious climate targets.
Despite its potential, the green hydrogen sector may encounter significant challenges, which Dr Schepis identifies as being due to demand, production costs and market competition.
“While green hydrogen is likely to play some role in our clean energy future, uncertainties persist regarding the scale of demand, viable applications, and its ability to compete with other clean energy sources,” he said. “The market is still in the exploratory phase.”
Dr Schepis said there was not currently a well-established demand for green hydrogen, the lack of a current market made it difficult for businesses to justify investments in hydrogen projects. High production costs also remained a barrier, though these are expected to fall as technology matures and economies of scale are achieved.
“Given there is little-to-no current market for green hydrogen, a big challenge for proponents hoping to get projects off the ground, is anticipating industrial customers’ intentions and adoption timeframes, as well as the format and amount of government support,” he said.
Establishing a comprehensive regulatory framework and securing long-term investments are also essential to the industry's growth. Furthermore, large-scale hydrogen production demands significant water resources, raising concerns in a water-scarce nation such as Australia.
With funding and support from the Woodside Monash Energy Partnership, Dr Schepis is working with colleagues at UWA and Monash University, to advance research on this topic from a business perspective.
This involves analysing corporate and media reports, as well as conducting in-depth interviews with stakeholders across Australia, including corporate and government representatives.
To advance Australia’s green hydrogen vision amid shifting global dynamics, the research claims that scaling up projects, fostering global partnerships, and addressing logistical hurdles are crucial.
“Our findings have helped us better understand the challenges of developing Australia’s hydrogen industry in the face of shifting global dynamics, showing unanimous agreement on the pivotal role of government support,” he said.
Establishing hydrogen hubs — integrated ecosystems for production, processing, and export — emerges as a promising strategy, leveraging government backing to reduce costs, drive innovation and position Australia as a leader in the global hydrogen economy.
As we look to the future, the commitment to sustainable energy solutions will be vital in shaping a low-carbon economy, with green hydrogen playing an essential role in this transition. However, decision-making regarding government support involves navigating complex, multifaceted issues as the interests and needs of different stakeholders are often in conflict, and resources are limited.
“These perspectives are not simple binary decisions, but they do highlight critical trade-offs in how finite government support is allocated, and whose interests are prioritised,” Dr Schepis said.
As such, he is confident green hydrogen represents a transformative opportunity for Australia to align its economic ambitions with its environmental responsibilities.
Dr Schepis believes that by harnessing its abundant renewable energy resources and leveraging its export expertise, Australia can establish itself as a global hub for green hydrogen. That this transition not only promises significant economic benefits but also aligns the nation with the urgent need for a sustainable and decarbonised future. With the right policies and investments, green hydrogen could become a cornerstone of Australia’s 21st-century economy.