The promise of a hydrogen economy is enthralling. It’s the story of a future powered by a clean, cheap fuel produced by renewable energy that flips the decline of Australian manufacturing on its head: from backwater to “powerhouse”.
The problem is it’s still only a story, the risk that it remains a “jam tomorrow” transformation based on a series of simplistic assumptions that get torn apart by economic reality.
First, it assumes that conversion of clean electricity into hydrogen can be made cost effective (it’s been around since 1869). If it does, that other economies don’t also move quickly to find ways to adapt and embrace clean hydrogen to protect existing steel making or develop their own industries.
The Grattan Institute has released its new report on the potential for a new and revitalised green steel industry for Australia.
Drawing heavily on the ideas proposed by Professor Ross Garnaut, Grattan has outlined the promise of a green steel renaissance in Australia, and specifically how it can employ the thousands of “carbon workers” in emissions intensive industries in regional Australia who voted for the Federal Government at the last election.
It ranks steel manufacture ahead of other heavy industries like aluminium and ammonia because of its ability to use hydrogen locally as a reductant in the steel making process, and being less reliant on transport or uninterrupted energy supply.
It’s a great story, particularly if it comes true, and is likely to further underpin funding, research and media releases into exploiting Australia’s hydrogen potential starting with the National Hydrogen Strategy.
But realising this could be decades away. Until then what does Government do? To date the promise of jam tomorrow has enabled the Federal Government playing a waiting game on climate policy, talking up technology solutions and avoiding anything that will impede the economy.
The problem is continued inaction is also impeding the economy. Do they protect the remaining domestic steel producers in anticipation for a green steel renaissance that could be decades away, if it occurs at all?