Australia's green hydrogen outlook

Australia’s Hydrogen Headstart program receives $2 billion boost

As part of a funding package of $7.1 billion for budgeted programs to be administered by the Australian Renewable Energy Agency (ARENA), the Australian government has allocated $2 billion for round two of the Hydrogen Headstart program.

Illustration purposes; Archive; Courtesy of Australian Renewable Energy Agency (ARENA)

Under this program, projects seeking to produce renewable hydrogen or derivatives, such as renewable ammonia or methanol, at scale can apply for a production credit delivered over ten years to bridge the commercial gap between the cost of producing renewable hydrogen and the market price.

Round one of the program is also worth $2 billion and is currently being delivered. At the end of 2023, ARENA revealed that six applicants had been shortlisted and invited to submit a full application, noting that recipients are expected to be announced in late 2024.

According to ARENA, this additional funding for the second round will help build on developing a local renewable hydrogen industry.

ARENA CEO Darren Miller said: “Hydrogen Headstart represents an important step towards Australia becoming a global renewable hydrogen leader. The current shortlisted applicants for Round 1 highlight the commitment from the private sector to develop this new industry. Additional funding for Hydrogen Headstart allows for even more projects to reach maturity and fast track our renewable hydrogen industry.”

To note, the expanded funding and new budget programs were announced in the 2024-25 Federal Budget.

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