Bulk tanker ship transporting gas

The development of our hydrogen resources is expected to enhance our energy security, create jobs and build an important export industry here in NSW.

The NSW Government supports the technology-neutral stance taken in Australia’s National Hydrogen Strategy as a way of creating the frameworks necessary to grow a clean hydrogen sector.

Clean hydrogen is produced by either using renewable energy to produce green hydrogen, or by using fossil fuels with carbon capture and storage (CCS) to create blue hydrogen.

As part of determining the most cost-effective method of creating clean hydrogen, Coal Innovation NSW (CINSW) commissioned the Global CCS Institute (GCCSI) to investigate the production costs of replacing 10 per cent of NSW’s natural gas supply with clean hydrogen.

The conclusions of the report indicate blue hydrogen could offer significant cost and emissions reduction advantages in the short and medium term, enabling rapid scale up of a clean hydrogen industry. It indicates that while electricity generation remains dominated by fossil fuels, greater emissions reductions could be achieved by using renewable electricity in the grid rather than in producing clean hydrogen. It also demonstrates that blue hydrogen is a cost-effective option for producing clean hydrogen in NSW in the short to medium term.

The study highlights the importance of CINSW’s work in making NSW CO2 storage ready. Developing storage capabilities for a blue hydrogen industry could also support the decarbonisation of other hard to abate sectors, such as steel, cement, mining and manufacturing.

View the Replacing 10 per cent of NSW Natural Gas Supply with Clean Hydrogen: Comparison of Hydrogen Production Options Report. (PDF, 1.5MB)