Green hydrogen is produced through the use of renewable power—often solar or wind—to electrolyze water into hydrogen and oxygen. That process is called electrolysis. If the electricity sourced is 100% renewable, the output is a fuel that’s completely carbon-free. That is why it’s “green.” That’s a giant leap ahead of the more prevalent grey hydrogen, which is produced from natural gas and emits carbon into the air.

Why We Still Need Hydrogen—Even with Solar, Wind and Batteries

You may be thinking, why on earth do we need hydrogen at all, given we’re already spending so much on solar, wind, and batteries. It’s a good question. The reality is, green hydrogen doesn’t cannibalise these technologies—it complements them.

There are segments of our economy that electricity simply can’t access cost-effectively. Steelmaking, chemical production, long-distance freight, and air transport all require a denser source of energy. Batteries aren’t feasible for those applications yet. Green hydrogen, however, can be stored, shipped, and applied in high-temperature or high-demand environments. It’s a clean energy answer where electrification isn’t an option.

Australia’s Natural Advantage

We’re lucky here in Australia. We’ve got world-class solar and wind resources, plenty of land, and a history of exporting energy. These natural advantages give us a serious edge when it comes to producing green hydrogen at scale.

In addition, nations such as Japan and South Korea already expect to come to us as a dependable future source of clean hydrogen. If we get our act together, we can become a dominant green hydrogen exporter—just like how we used to dominate with coal and gas. The only difference is that this time, the commodity is emissions-free.

Hydrogen Can Help Balance Our Grid

There’s a second reason green hydrogen is worth so much—it can balance our electricity grid. As wonderful as renewable energy is, it’s not always there when you need it. The sun isn’t shining every day, and the wind isn’t blowing when it needs to. Hydrogen provides a mechanism for storing that excess renewable energy when we need to generate it most and using it later—sometimes even days or weeks later—when we want it more.

That type of long-term storage is something batteries aren’t quite capable of delivering at scale. Hydrogen serves as a versatile energy buffer, keeping the lights on even when the weather won’t.

The Projects Are Already Happening

This is not theory or grandstanding—green hydrogen schemes are actually being implemented all over the country. Western Australia’s Asian Renewable Energy Hub will produce renewable energy in the Pilbara to make hydrogen and ammonia for export. South Australia is spending on a hydrogen-fired power station and major electrolyser plant near Whyalla. Queensland has a Central Queensland Hydrogen Project in the works, and Tasmania is incorporating green hydrogen into its overall clean energy plan.

These ventures are drawing genuine investment and generating jobs, particularly in regional communities traditionally based on fossil fuel industries.

How It’s Made and Where the Tech Is Headed

The technology behind green hydrogen is relatively simple. We electrolyse water into hydrogen and oxygen using renewable power. If the power is clean, then the hydrogen is clean too. There are various kinds of electrolysers—some can better manage constant power, others are excellent at dealing with the fluctuating nature of solar and wind. The tech is changing rapidly, and it’s becoming more efficient and cheaper each year.

Yes, There Are Some Challenges

Now, let’s be honest—green hydrogen still has some hurdles to overcome. One of the biggest challenges is cost. Right now, it costs about twice as much to produce green hydrogen compared to grey hydrogen made from gas. But with falling renewable electricity prices and rapid improvements in electrolyser efficiency, we’re getting closer to price parity. Some experts reckon we’ll get there in the next five to ten years—especially in Australia, where the sun and wind are both plentiful and cheap.

Another issue is infrastructure. Hydrogen requires specialised handling. It’s a very light and reactive gas, so it needs high-pressure storage and dedicated pipelines or transport systems. Retrofitting our current gas networks to handle hydrogen might work in some places, but we’ll likely need brand-new infrastructure to make the most of it.

Managing Water Use Wisely

Water consumption is also an issue, particularly in a nation like ours where water is already scarce. Electrolysis takes around nine litres of water per kilogram of hydrogen output. That may not sound like a lot, but it adds up fast at industrial scale. Luckily, most schemes are coast-based, where the alternative of desalination is viable. Others are also testing the use of reclaimed wastewater to relieve pressure on freshwater sources. It’s simply a matter of planning ahead and being good stewards with our resources.

We Need Skilled Workers and Smart Policy

To develop this sector in the right way, we must invest in people and infrastructure. That involves educating electricians, engineers, safety inspectors, and technicians who know how to handle hydrogen. We must also have constant regulation throughout states and territories so that projects can be progressed without ambiguity or unnecessary bureaucracy.

The best news is, it’s already underway. Government planning such as Australia’s National Hydrogen Strategy is offering direction, and public and private sector investment is assisting in bringing projects out of the ground.

A New Opportunity for Regional Australia

For country towns, green hydrogen may be the next economic boom. It creates new jobs in construction, transport, operation, and maintenance—particularly where old energy industries are in decline. By establishing hydrogen hubs right around the nation, we can share the benefits more broadly and keep energy jobs in Aussie hands.

We actually have a good chance to make our clean energy a precious export, energize our homegrown industries, and harden our grid—all simultaneously. The demand is headed our way, and the globe is watching.

Let’s Not Miss the Boat

Green hydrogen isn’t a silver bullet—but it’s a major piece of the clean energy puzzle. It gives us a way to decarbonise sectors that can’t run on electricity alone, helps stabilise our power supply, and positions us as a leader in the global energy transition. If we’re smart about it, green hydrogen can complement solar, wind, and batteries—and turn Australia into a clean energy superpower.

We’ve got a good head start already, but now we need to turn it up a notch. We have the land, the resources, the expertise, and the global linkages. Now we just need sustained investment, worker training, facilitating regulation, and most importantly—momentum.

Why We’re Supporting Hydrogen

At the end of it all, green hydrogen provides us with an opportunity to redesign how we make, consume, and distribute energy. It’s a solution that is good for our climate future, good for our economy, and good for our regional communities. We’ve been world leaders in mining and fossil fuel exports—now we have an opportunity to become world leaders in clean energy as well.

This is our chance to fuel the future—cleanly, reliably, and proudly produced in Australia.