Integrating hydrogen into energy systems has become a major international priority. The principal objective is to exploit hydrogen’s potential to unlock greater renewables penetration, and thus avoid the most extreme effects of climate change. However, energy security, technology leadership, and infrastructural concerns also support the hydrogen agenda.
Many governments are seeking to establish hydrogen in the Indo-Pacific energy system, and the creation of an integrated Indo-Pacific hydrogen market would transform regional geopolitics.
Australia’s most significant opportunity in this emerging market lies in its potential role as the principal supplier of green hydrogen, with few other countries as well-placed for the job. However, international cooperation will be essential to create this market and realise Australia’s position in it.
This report, written by Perth USAsia Centre Policy Fellow, James Bowen, highlights the critical importance of countries working together to overcome obstacles such as a massive need for new infrastructure investment over several decades, examines the huge, shared benefits that could flow from a successful process, and provides several practical policy recommendations to help Australia realise its own and the broader Indo-Pacific’s hydrogen potential.
Integrating hydrogen into energy systems has become a major international priority. The principal objective is to exploit hydrogen’s potential to unlock greater renewables penetration, and thus avoid the most extreme effects of climate change. However, energy security, technology leadership, and infrastructural concerns also support the hydrogen agenda.
Many governments are seeking to establish hydrogen in the Indo-Pacific energy system. The leading players – including Japan and Korea – are from the region and have led the past development of new energy markets.
Extra-regional players, principally from Europe, are also drawn to the Indo-Pacific’s huge hydrogen opportunities. The creation of an integrated Indo-Pacific hydrogen market would transform regional geopolitics. It would help avoid the worst effects of climate change. It would
also sustain greater levels of energy security and regional interdependence.
New winners and losers will emerge from new structures of energy production, consumption, and trade. The strategic effects of a hydrogen transition are likely to be overwhelmingly positive for Australia and its regional partners.
Australia can become a regional hydrogen superpower. It has the natural resources and technical capacity for large scale production of ‘green’ hydrogen, and is an established and reliable energy supplier to the region. Indeed, Australia’s emergence as a hydrogen exporter is essential to create an integrated regional market that delivers shared environmental, economic, and strategic dividends.
However, international cooperation will be essential to create an Indo-Pacific hydrogen market. The major priorities including mobilising investment in dedicated energy infrastructure, establishing regional standards, and sharing the benefits and risks when creating crossborder value chains.
There are several steps Australia can now take to help realise the Indo-Pacific hydrogen vision. At home, governments should prioritise accelerating domestic hydrogen development, with a focus on export-oriented green hydrogen projects. Internationally, it will be essential to work with partners to establish regional platforms for trade, investment, and energy system integration.
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