Latest update: NSW Hydrogen Strategy launched
Hydrogen is the smallest molecule and the most common chemical element in the universe. While hydrogen is abundant, it is not freely available as a gas on Earth and needs to be extracted from water, fossil fuels or biomass.
There are 3 primary methods for producing hydrogen:
- Electrolysis: where electricity is used to split hydrogen from water. When renewable electricity sources such as wind and solar are used in the electrolysis process the product is referred to as ‘renewable hydrogen’ or ‘green hydrogen’.
- Steam methane reforming: where hydrogen is produced through a chemical reaction with natural gas and water at a high temperature.
- Coal gasification: where hydrogen is produced through a chemical reaction with coal and water at a high temperature.
The methods that use fossil fuels produce carbon emissions. Hydrogen made from fossil fuels that is paired with carbon capture and storage, can store up to 90% of carbon emissions and is often called ‘blue hydrogen’.
Hydrogen can be used in a range of applications, including:
- as a replacement for petrol and diesel in transport applications
- as an input into industrial processes, including ammonia production
- for injection into gas distribution networks
- as part of a blend with natural gas for use in heating and cooking
- for on-demand electricity generation
- for overseas export.
A green hydrogen industry will pave the way for a net zero emissions future while driving economic growth. It will help us:
- reduce our carbon emissions in hard-to-abate sectors
- improve air quality
- grow and diversify our economy
- create new jobs
- improve our energy security
- provide businesses with more choices to increase revenue and reduce emissions.
To create the policy framework needed to fully realise these opportunities, NSW has released the NSW Hydrogen Strategy.
NSW Hydrogen Strategy
The policies set out in the Strategy aim to:
- reduce the cost of green hydrogen by $5.80 per kg in the next decade
- provide up to $3 billion of incentives to support industry development
- deliver our 2030 stretch target of 110,000 tonnes of annual green hydrogen production
- drive decarbonisation in the hard to abate transport, industrial and energy sectors to help us reach net zero emissions by 2050.
Read the Strategy here.
Other policies relating to hydrogen:
- The Net Zero Plan Stage 1: 2020-2030: the third priority area of the plan is investment in the next wave of emissions reduction innovation, including hydrogen technologies. Under the Net Zero Plan, the Government also announced a target of up to 10% hydrogen in the gas network by 2030.
- The Electricity Infrastructure Investment Bill 2020: passed in December 2020, which commits the state to at least $50 million spent to develop the green hydrogen sector from 2021 to 2030. This will include support for the production, supply, use and export of hydrogen energy produced from renewable energy sources.
- The Net Zero Industry and Innovation Program: announced in March 2021, to deliver low emissions products, technologies and services to help accelerate and pave the way to a net zero emissions future for NSW. Under this, the $70 million hydrogen hub initiative is supporting the development of hydrogen hubs in the Hunter and Illawarra regions.
If you have any queries about hydrogen or any information on this page, email the hydrogen team at hydrogen [at] planning.nsw.gov.au.