Already a Large Market

Hydrogen is not a new commodity; in fact, it has a large existing market. Current production* is already in excess of 90 million tonnes a year, mainly for refining and industrial applications and produced almost completely from fossil fuels. Its use as a source of energy is about the future, and the future is happening faster than you might think.

* According to the International Energy Agency.

Mind the Cost Gap

A key barrier for low carbon emitting hydrogen is producing it at low cost.

Fossil fuel production has been low cost, but is high carbon emitting. Depending on gas prices, the hydrogen production cost is US$0.50-1.7/kg, compared to US$3-8/kg utilising renewable energy.

However, The game is quickly changing. In the long term, hydrogen costs utilising renewable energy are expected to fall to US$1/kg within a range of US$1-3/kg.

Why the Game is Changing in Favour of Renewables

Simply put, the declining cost of fuel cells, which provide the electrolysis that converts hydrogen into electric energy. The cost of automotive fuel cells has dropped by 70% since 2008 due to technological progress and the growing sales of fuel cell electric vehicles.

Potential growth areas for hydrogen propulsion substitution from fossil fuels includes trucking, rail, shipping and aviation.

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Australia is Well Placed

Australia has favourable renewable wind and solar energy to produce hydrogen from water using electrolysis. BUT, it needs to be very large scale to produce hydrogen as close to US$1/kg as possible.

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