Australia has the potential to significantly reduce global carbon emissions and generate billions in export earnings through the use of green hydrogen for various products, according to global consultancy Partners in Performance.
Partners in Performance’s Brian Innes suggests Australia’s green hydrogen industry should shift from exporting carbon-neutral fuel to local production of traditionally carbon-intensive products for export.
“The production of steel, shipping and aviation fuels, fertilisers, explosives, and cement alone account for over a quarter of global greenhouse gas emissions,” Innes said.
He explained that Australia could reduce its emissions through renewable energy and significantly impact its trading partners’ emissions through local production and export of green steel, fertilisers, cement, eFuels, and mining explosives.
“Substituting products produced overseas with Australian coal and LNG with locally manufactured products using locally-produced green hydrogen will massively reduce Australia’s upstream emissions,” he continued.
Partners in Performance estimates that the global demand for environmentally friendly products is in the trillions of dollars.
Meanwhile, critics argue that Australia’s efforts to reduce emissions are insignificant due to its only 1.5% share in global emissions.
“We are blessed with the land, sun and wind needed to make enough renewable energy to produce green hydrogen which can be used in the production of products that other countries are producing with large carbon footprints,” Innes said.
He noted that by displacing producers, Australia can significantly decrease emissions in other countries.
“Countries will no longer rely on Australian coal and LNG to manufacture steel, fertilisers, aviation and shipping gas and ammonia, significantly reducing their greenhouse gas emissions produced from burning Australian sources coal or used in the production of steel from burning Australian sources coal or used in the production of steel from our iron ore,” Innes stated.
“In essence, we have the potential to make a substantial impact on a quarter of global emissions through the provision of green iron, green ammonia, green eFuels, green mining explosives and green cement,” Innes said.
However, he emphasised that regulators could enforce pro-renewable rules to boost local industries, such as mandating eFuels use for all Australian ships and setting quotas for green hydrogen production in locally produced steel.
“The production of green hydrogen is very capital intensive, so in order to develop at scale, we need regulators to help drive that,” he added.
Globally, 176 million tonnes of ammonia are produced annually, primarily for fertiliser, using a century-old process that strips hydrogen from natural gas using steam, producing CO2 as a by-product and combining it with nitrogen from the air at high pressure and temperatures.
Meanwhile, green ammonia uses renewable energy to remove hydrogen from water, eliminating carbon emissions and maintaining the same process as natural gas.
The consultancy group noted that green ammonia markets extend beyond fertilisers, with liquid ammonia being considered a potential fuel for shipping, contributing to 3% of global emissions.
Green hydrogen is a versatile fuel source used to produce eFuels for vehicles, trucks, and aircraft. It is synthesised with carbon dioxide, resulting in methanol, which can be directly powered or refined into gasoline, serving as a substitute for petrol and diesel.
In addition, Partners in Performance noted that the cement sector can reduce CO2 emissions by 50% by incorporating green hydrogen as a reducing agent in raw material blends, thereby reducing clinker content.
“Australia keeps beating itself up about whether it can meet its emissions targets and yet it possesses the means to not only drive down global emissions but also generate substantial export earnings amounting to many billions of dollars,” Innes said.