Australia Hydrogen Market Size, Share Analysis and Forecast Report 2025-2034

Australia Hydrogen Market Trends

The growth of the Australia hydrogen market is driven by its role in supporting the transition to clean energy and reducing dependence on fossil fuels by providing low-emission alternatives for power, transport, and industry. It facilitates the decarbonisation of hard-to-electrify sectors like steel and cement. Australia's capacity to produce green hydrogen positions it as a global leader in clean energy, with abundant renewable resources and significant export potential, especially in high-demand Asian markets. The hydrogen industry also stimulates economic growth, creating new industries and job opportunities, particularly in regional areas. In 2024, over 76 major hydrogen projects have been announced, with three under construction, highlighting strong interest and investment in the sector, according to Geoscience Australia.

The demand for the Australia hydrogen market is rising as it enhances energy security by diversifying the energy mix and providing a flexible, long-term energy source. It supports job creation, with thousands of roles emerging in sectors such as production, distribution, and infrastructure. The market fosters technological innovation in areas like electrolysers and hydrogen storage, while hydrogen can stabilise the electricity grid as an energy storage solution, particularly when paired with renewables. The development of key infrastructure, such as refuelling stations and pipelines, is essential to supporting the hydrogen ecosystem. With over AUD 200 billion in investment for hydrogen and its derivatives in Australia, both government and private sector interest is strong, according to Geoscience Australia.

Australia Hydrogen Market Growth

The development of the Australia hydrogen market is driven by hydrogen’s ability to significantly reduce greenhouse gas emissions when produced from renewable sources, compared to traditional fuels. It offers a sustainable transport solution, especially for heavy-duty vehicles such as trucks, buses, and ships. Hydrogen production in rural areas can boost local communities and stimulate economic growth. Australia’s hydrogen goals encourage international collaboration, fostering opportunities for research, technology exchange, and trade. Moreover, domestic hydrogen production can reduce reliance on energy imports, strengthening national energy security. In November 2023, Brisbane-based Gold Hydrogen reported significant hydrogen concentrations of 73.3% at its exploration site in South Australia, indicating an active hydrogen system.

Hydrogen also has potential for domestic use in heating and cooking, influencing the Australia hydrogen market dynamics and trends by integrating into natural gas networks to help decarbonise these sectors. The market aligns with Australia’s climate goals, supporting the nation’s commitment to achieving net-zero emissions by 2050. It attracts both domestic and international investment in green technologies and infrastructure development. Hydrogen hubs could stimulate regional development, creating new economic and social opportunities outside major cities. Lastly, Australia's abundant renewable energy resources and strategic location provide access to a diverse range of global hydrogen markets.

Australia Hydrogen Market Insights

• According to ARENA, by 2040, the demand for hydrogen exported from Australia could surpass 3 million tonnes annually, potentially generating up to AUD 10 billion for the economy each year.
• Industry reports suggest that hydrogen exports could contribute AUD 1.7 billion to the economy and create 2,800 jobs by 2030, demonstrating substantial growth potential.
• As of 2024, the Queensland government reports that the state has over 50 renewable hydrogen projects at different stages of development, with plans to establish itself as a leading producer and exporter of hydrogen by 2030.

Industry News

April 2024

Fortescue Metals Group's subsidiary, Fortescue Future Industries, is moving forward with plans to produce green hydrogen from renewable sources by 2030, backed by an AUD 13.7 million grant from ARENA for feasibility studies.

February 2024

Frontier Energy aims to become Australia's first commercial producer of green hydrogen, utilising renewable energy from its Bristol Springs project in Western Australia. The company is making progress towards achieving low-cost production capabilities.

Australia Hydrogen Market Drivers

Government Support and Policy Framework

The Australia hydrogen market is experiencing substantial growth, driven by significant government support through initiatives such as the National Hydrogen Strategy. These policies aim to establish Australia as a global leader in hydrogen production and export. The government is making substantial investments in infrastructure, research, and technology to encourage hydrogen adoption. This backing is intended to make hydrogen a competitive energy source for both domestic use and export markets, with a focus on renewable energy production, emission reduction, and job creation within the clean energy sector. In May 2023, the Australian government announced the AUD 2 billion Hydrogen Headstart initiative to support large-scale renewable hydrogen projects, helping to close the commercial gap for early-stage ventures and fostering industry growth and innovation, according to the Department of Climate Change, Energy, the Environment and Water.

Technological Innovation and R&D

Advancements in hydrogen production, storage, and transportation are driving growth of Australia hydrogen market. Investment in research and development (R&D) is essential to lowering production costs and improving the efficiency of hydrogen technologies. Innovations in electrolysis, hydrogen storage, and fuel cell technology are expected to enhance scalability and make hydrogen more commercially viable. Collaborations between industry leaders, universities, and research institutions are encouraging progress in hydrogen technologies. These innovations will also support Australia's hydrogen export goals, ensuring competitive pricing and meeting the growing global demand. In September 2024, the Australian government introduced its updated National Hydrogen Strategy, which focuses on accelerating clean hydrogen technology development and prioritises R&D to improve production efficiency and reduce costs, positioning Australia as a global leader in the hydrogen market, according to the Department of Climate Change, Energy, the Environment and Water.

Opportunities in the Australia Hydrogen Market

The creation of a comprehensive hydrogen infrastructure network is a major trend in the Australia hydrogen market. This involves the construction of hydrogen production facilities, refuelling stations, pipelines, and storage units. Developing this infrastructure is crucial for both domestic consumption and export capabilities, especially in remote or regional areas where hydrogen production can benefit local industries and communities. Australia is investing in large-scale hydrogen hubs, which will act as centres for production, research, and export logistics.

The expansion of infrastructure is expected to generate economic benefits, create jobs, and support a nationwide shift towards hydrogen-powered energy solutions. As part of its National Hydrogen Strategy, Australia aims to establish a robust hydrogen infrastructure by 2030, with government investment in regional hubs to enhance production, storage, and distribution, ensuring efficient supply chains for both domestic use and exports, according to the Department of Climate Change, Energy, the Environment and Water, January 2024.

Market Restraints

The Australia hydrogen market faces several key constraints despite its growth potential. High production costs, particularly for green hydrogen, remain a significant challenge, as electrolysis technology and renewable electricity are still expensive. Infrastructure gaps, such as the lack of pipelines, refuelling stations, and storage facilities, hinder large-scale production and distribution.

Technological limitations, including efficient hydrogen storage and transportation, especially for export, also pose barriers. Market uncertainty and inconsistent policies can deter investment, with frequent changes in government and energy policy affecting long-term planning. Furthermore, competition from other renewable energy sources like wind, solar, and battery storage, as well as reliance on cheaper natural gas, may limit hydrogen's short-term attractiveness.

Australia Hydrogen Market Share

Market Analysis by Sector

According to the Australia hydrogen market analysis, hydrogen storage plays a critical role in balancing supply and demand within the energy sector. It allows surplus renewable energy to be captured, stored, and used later, which boosts energy security and aids the transition to a low-carbon economy. Efficient storage solutions are vital for hydrogen's success as a clean fuel. In November 2023, Provaris Energy revealed its development of floating storage solutions for compressed hydrogen, improving supply chain efficiency. The H2Leo vessel will be capable of storing 300-600 tonnes of hydrogen, helping to overcome storage challenges in remote areas.

The Australia hydrogen market is further strengthened by the importance of hydrogen transportation in creating a robust hydrogen economy. It ensures the efficient movement of hydrogen from production sites to end-users, promoting both domestic use and export opportunities, and positioning Australia as a global leader in hydrogen. In January 2024, the Hydrogen Energy Supply Chain (HESC) project successfully transported liquefied hydrogen from Australia to Japan, showcasing hydrogen's potential as an export commodity and laying the groundwork for future international trade agreements.

Market Analysis by Application

According to the Australia hydrogen market report, hydrogen mobility is a key driver, offering a clean alternative to conventional fossil fuels and significantly cutting greenhouse gas emissions in transportation. Hydrogen fuel cell vehicles (FCVs) provide fast refuelling and long driving ranges, making them ideal for public transport and heavy-duty freight, thus aiding Australia’s decarbonisation objectives. In February 2024, Hyundai launched a new fleet of hydrogen fuel cell buses in Sydney, designed to reduce emissions in public transport. These buses incorporate advanced technology for greater efficiency and sustainability, contributing to cleaner urban environments.

The Australia hydrogen market revenue is further supported by hydrogen's role in the chemical and refinery sectors, where it serves as a feedstock for producing ammonia, methanol, and other chemicals. Its use enhances cleaner production processes, lowers carbon emissions, and promotes sustainable industrial practices in Australia's manufacturing industry. In November 2023, Incitec Pivot unveiled a green ammonia project in Queensland, aiming to produce ammonia using renewable hydrogen. This initiative supports sustainable agriculture while reducing emissions from traditional ammonia production methods.

Australia Hydrogen Market Regional Insights

New South Wales Hydrogen Market Overview

According to the Australia hydrogen industry analysis, the hydrogen market in New South Wales is poised for substantial growth, driven by government initiatives and investments in renewable energy. The state aims to lead in hydrogen production, supporting both domestic consumption and international exports while generating jobs and fostering innovation. By 2023, New South Wales had a hydrogen production capacity of around 5,000 tonnes per year, predominantly from renewable sources, demonstrating its commitment to a clean energy transition, according to the NSW Department of Planning and Environment.

Queensland Hydrogen Market Trends

Queensland is swiftly advancing its hydrogen market with a strong focus on renewable hydrogen production and export capabilities. Utilising its rich natural resources and strategic location, Queensland aims to enhance its position in the global hydrogen economy. By 2050, hydrogen production is projected to reach up to 280 megatonnes per year, positioning the state as a key player in international hydrogen exports, according to the Queensland Government Enabling Hydrogen Report.

Western Australia Hydrogen Market Dynamics

Western Australia is emerging as a significant force in the hydrogen sector, backed by considerable investments aimed at building a strong hydrogen economy. The state is focusing on leveraging its natural resources and existing infrastructure for large-scale hydrogen production and export. Western Australia has forged key partnerships with international companies to develop major hydrogen projects, targeting both domestic demand and export opportunities in Asia-Pacific markets by 2030, as per the WA Department of Jobs, Tourism, Science, and Innovation Report.

Competitive Landscape

The Australia hydrogen market key players offer a wide range of products and services, including industrial gases such as oxygen, nitrogen, hydrogen, and carbon dioxide, as well as associated technologies. These companies serve diverse sectors, including healthcare, manufacturing, energy, food, and chemicals, improving productivity, safety, and environmental sustainability. They are committed to innovation, focusing on developing advanced technologies like hydrogen production, energy-efficient solutions, and carbon capture. These companies are also recognised for their leadership in clean energy and decarbonisation efforts, significantly contributing to the global shift towards more sustainable energy systems.

Key Industry Players

Linde plc (BOC Limited): Established in 1906, Linde plc (previously BOC Limited) is a global leader in the industrial gases sector. Headquartered in Surrey, United Kingdom, the company provides a wide range of products and services, including oxygen, nitrogen, and hydrogen, to various industries such as healthcare, manufacturing, and energy.

Shell plc: Founded in 1907, Shell plc is one of the world’s largest oil and gas companies, with its headquarters in The Hague, Netherlands. Shell focuses on energy production, refining, and distribution, while increasingly transitioning to renewable energy and sustainable practices. It is a global leader in the energy sector.

Air Liquide Australia Limited: It is a part of the global Air Liquide Group and was established in 1902. Headquartered in Sydney, Australia, the company specialises in providing gases and services to industries such as healthcare, manufacturing, and energy. It is a leader in supporting sustainable energy solutions and industrial applications across Australia.

Recent Developments

July 2024

CSIRO's HyResource revealed that, as of mid-2024, Australia is evaluating over 76 significant hydrogen projects, reflecting strong interest and investment in building a robust hydrogen economy across the country.

August 2023

Pure Hydrogen displayed its hydrogen fuel cell-powered vehicles at the Brisbane Truck Show, highlighting its dedication to promoting the adoption of hydrogen technology in the transportation and waste collection industries throughout Australia.