The state-of-play for decarbonising ammonia in Australia: new government report

Click to read the new report: State of Hydrogen 2022, from Australia’s Department of Climate Change, Energy, the Environment and Water.
Click to read the new report: State of Hydrogen 2022, from Australia’s Department of Climate Change, Energy, the Environment and Water.

A new report from Australia’s Department of Climate Change, Energy, the Environment and Water has set out the state-of-play for decarbonised hydrogen projects in the country. Although Australia remains at risk of becoming a global laggard in the emerging renewable hydrogen industry, progress in decarbonising hydrogen for chemical feedstocks is advancing quickly. And while the opportunity for Australia to become a world-leading exporter of green molecules is highlighted, the report suggests the best progress to date has been made on a domestic opportunity: decarbonisation of existing ammonia production within Australia.

This year’s report is also a call to action. Most of the project announcements in this pipeline are yet to reach final investment decisions. Global hydrogen leaders have caught up to our early lead and are advancing fast. We face determined competition from other countries in the hydrogen race, that also see the hydrogen opportunity and are implementing substantial and practical measures to stimulate their own industry growth.

Australian Minister for Climate Change and Energy the Hon. Chris Bowen in State of Hydrogen 2022, DCCEW (Apr 2023)

85% of Australian hydrogen used for ammonia production

Of the near 500,000 tonnes of gas-based hydrogen produced in Australia each year, 85% currently becomes feedstock for ammonia production. This activity is centred on seven production sites: four in Queensland, two in Western Australia and one in New South Wales. Some of these sites already have decarbonisation projects underway: notably Project YURI at Yara Pilbara Nitrates in WA, Gibson Island in Qld, and Kooragang Island in NSW. The CSBP Kwinana plant in WA will double in size over the coming years, with a series of decarbonisation projects to be announced. And although not progressed to project stage, feasibility studies for renewable ammonia production at the Dyno Ammonium and Moura Ammonium Nitrate plants in Qld were completed by Incitec Pivot & ARENA in 2021, with promising results. Decarbonised hydrogen for ammonia manufacturing in Australia is one of only two “industry development signals” that is advancing quickly, the other being export overseas for electricity generation.

Key recommendations: hubs, skills & regulatory updates

The report argues the best way to ensure implementation of projects of scale is to support the development of hydrogen hubs around Australia. These centres of activity will provide “enabling infrastructure, capacity to scale…synergies among sectors…and [help] foster innovation”. Clear, easy access to government funding will help these projects break ground. Ammonia features in several of these proposed hubs: Kwinana, Hunter Valley and Mid-West (amongst others).

But, these large-scale projects will need people-power to bring them to life. The report stresses that providing the skills & training to develop Australia’s hydrogen (and ammonia) workforce will be crucial. The report notes three roadmap initiatives on the subject: in Victoria, Queensland and New South Wales, as well as collaborative platforms like HyResource that facilitate knowledge-sharing. On the regulatory side, certification is critical for international trading, but on the domestic front updating legislation to allow the use of hydrogen & ammonia energy in Australia will be needed.

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