Paul Barrett, Hysata CEO: It was really wonderful to welcome the Minister here to visit Hysata, not only showcasing our game-changing technology but also demonstrating what we’re building here in Wollongong. We’re building a manufacturing line here to build the world’s best electrolyser. Hysata’s electrolyser technology redefines the economics of green hydrogen production. Simply put, we can make hydrogen cheaper than anyone else in the world.
We are an era-defining company on Australia’s transition to net zero. We have Australian-invented technology, manufactured in Australia, creating high-tech jobs for Australia. It was really great to speak with the Minister about the Hydrogen Headstart program, the National Reconstruction Fund and more generally the government’s ambition to help Australia and the world on a path to net zero.
Tim Ayres, Assistant Minister for Trade and Assistant Minister for Manufacturing: Thanks, Paul. Well, thank you very much, Paul, for the opportunity, firstly, to tour your Unanderra facility with local Labor member Alison Byrnes, but also to visit this exciting new facility and to talk with your staff. Hysata is just one of the most important opportunities that we have as a country to make Australia a renewable energy superpower, to make sure we commercialise Australian technology onshore and provide good jobs, particularly here in the Illawarra, for Australian workers, Australian engineers and to contribute to the Australian industrial capability of the future.
This Budget was a great budget for Australian manufacturing. $2 billion in the Hydrogen Headstart program which will be there to create a market for hydrogen production in Australia to make sure hydrogen production is onshore in Australia with Australian technology and an Australian workforce. The Albanese Government is determined to make sure that we reindustrialise the Australian economy, that we meet the global challenge in terms of climate, that we make Australia a renewable energy superpower and that we meet the competitive challenge for Australian manufacturing.
The Budget makes two really important contributions in this area. Number one, the Hydrogen Headstart program, $2 billion for Australian hydrogen production. Secondly, there’s a clear intent in the Budget to set up a process to make sure that given what’s happening overseas, particularly in the American system where there are big production subsidies for manufacturing there, that we make sure that Australian manufacturing maintains its competitive edge.
We are determined to make sure that Australian industry is in the frontline of the opportunities for the renewable energy superpower, and that means good jobs in industrial heartlands like right here in the Illawarra.
Journalist: Maybe we’ll talk about the fund to begin with - $2 billion but only spending 150-odd over the forward estimates. How do you – there’s not much detail on how you’re going to spend that money.
Is it going to be a grants process? Is it going to be incentives for bringing down the cost of exporting green hydrogen, for instance? Can you walk us through how that will work?
Assistant Minister: So, this will be based upon production. The Australian community is going to win out of this $2 billion fund because what it is about is ensuring that we’re producing hydrogen onshore in Australia. So, the estimates over the forwards are lower because we anticipate that hydrogen production in Australia starts from a low base and then increases beyond the forwards to be very significant indeed.
We’re looking at the right mix of incentives and subsidies to deliver Australian production of hydrogen done by Australian workers in Australian facilities. That’s what the fund is all about. We should anticipate that their uptick will happen beyond the forwards, but our commitment is to send a really strong market signal to the investment community, put the investment into Australian know-how, put the investment into Australian engineering. We are blessed as a continent with industrial capability, we have the world’s best reserves of solar and wind. Let’s make sure it delivers a jobs dividend for Australia. The Government is sending that clear market signal to the investment community and the scientific community now that Australia should be the destination for renewable energy investment.
Journalist: How long do you think it will take for a company like Hysata to apply for whatever this funding, whatever form it takes, and, what do you see as a company like Hysata, how do you think a company like that will get an advantage from this fund?
Assistant Minister: Well, there are two components to what the Government is doing here. Firstly, the $2 billion is for producers of hydrogen. Hysata is an input. They produce electrolysers for the hydrogen production process. So, this assists by creating an Australian market for hydrogen.
The second thing, of course, is we are looking very closely at the competitive issues that there are for Australian industry and for manufacturers like Hysata, and there is a commitment in the Budget to develop a program of incentives to make sure that we meet the competitive challenge. So, we are determined to deal with the hydrogen market issues, with the broader energy issues but also to make sure that our focus is on companies like Hysata, their engineering and production workforces and making sure that we are delivering a policy framework that delivers that investment here in Australia and here in the Illawarra.
Journalist: In terms of green hydrogen and why the Albanese Government chose to put this very strong signal out about green hydrogen and it’s backing of green hydrogen, I’ve spoken to some businesses in other renewable sectors who are concerned that they weren’t given a targeted fund in the same way that hydrogen was.
Broadly there was a lot of renewable investment, but, for instance, lithium batteries, that’s a technology that’s very much ready to influence and play so to speak, whereas hydrogen, green hydrogen, is still a way down into the future. What would you say to sort of companies who are saying, “Well, maybe green hydrogen has got a disproportionately large amount of public investment compared to, say, lithium batteries”?
Assistant Minister: As I say, there’s two components to this; the Hydrogen Headstart program, but also a commitment from the Government - $5.6 million in the Budget – to work through the incentives for each of these industry sectors that matter in the clean energy revolution. So, batteries, wind, solar, all of these sectors, making sure that Australia is feeding into the electric vehicle supply chain. All of these areas that are impacted that are the subject of the Government’s ambitions to reindustrialize the Australian economy will be closely examined over the examining months.
We are not doing policy design here on the back of an envelope; we are investing serious work and time in making sure that we get the policy mix right. And you can look forward to – I say to those companies, work with the Government. Make sure that they are contributing to the policy design here. Let’s deliver an outcome that brings more investment, and that Australia wins the race, the global race, for energy superpower jobs.
Journalist: And you’ve got the national battery framework that’s been developed. Do you have a timeline on that, when these companies can see a bit of a timeline for when they can start benefiting from significant Federal Government funding?
Assistant Minister: There is no one single answer here for delivering our renewable energy superpower objectives. There is policy work and delivery that needs to be done across all of the Government’s work in this area. So, the National Battery Plan, working on the big issues in green steel, working with the hydrogen sector, working with the hydrogen manufacturing sector. All of these require a different and complementary policy answers. What we have got is a $15 billion National Reconstruction Fund that deals with the commercialisation challenge. We are now saying we are also going to deal with the global competitive challenge and make sure that Australia wins the race for global jobs in all of these sectors.
Journalist: I guess the question for Paul, just regarding what Tim was saying about investment and the timeline for investment, for a company like Hysata, would you prefer to have that money sooner rather than later, or do you agree that it is a matter of, if we’re talking long term I guess it will have to be an exponential increase in funding?
Paul Barrett: So, if you look at the green hydrogen industry, green hydrogen is really targeted at those hard to abate sectors that are difficult to electrify, so industries like steel, chemical manufacture, heavy transportation, high-grade industrial heat and energy export. We’re in that transition to decarbonise those industries, and it’s going to take years and into decades to really get those industries deeply decarbonised.
So, we’re kind of at the beginning of this green hydrogen journey. And as the Minister mentioned, Australia’s in pole position to really win this race globally, and it’s with the right policy settings that gives companies like ours the chance to get our technology to market quickly and compete with other global suppliers.
Journalist: What would you like to see from this fund, the Hydrogen Headstart fund? What would your company – how would your company benefit? Is it a matter of a bit of funding or is it, you know, some sort of tax breaks. What would suit Hysata?
Paul Barrett: So, with this Hydrogen Headstart program, this really funds our customers. So, there’s going to be multiple projects around Australia that have now got an economic benefit to get their green hydrogen projects to scale quickly. And as a manufacturer of electrolysers, that are the technology that manufactures the green hydrogen, we’ve now got an opportunity to sell early to these Australian customers rather than shipping our product overseas.
Journalist: And is it a matter – I don’t know if this is for you, Paul, or for Tim – but is it a matter of getting – incentivising that price to come down to closer to that $2 a kilogram mark? Is that what I understand makes green hydrogen economically viable?
Assistant Minister: So, what the Hydrogen Headstart fund does is send a clear market signal to the hydrogen manufacturing sector to make hydrogen in Australia. And getting that right, getting that investment signal now is absolutely crucial. And what we’ve seen is that being broadly welcomed by the potential investment in Australia. We’ve seen significant industry leaders coming out over the last couple of days saying this is exactly what is required to deliver investment in green hydrogen manufacturing here.
Now, as Paul says, what that means is we are creating a market here and for Australian producers of hydrogen electrolysers, like Hysata. That sends a clear market signal to them that they can have confidence to invest.
Now, this facility here is going to be a landmark facility for Illawarra industrial investment. It will employ many, many hundreds of people. Hysata has worked with the Government, with the Clean Energy Finance Corporation, and others to deliver the right mix of government and private sector support to drive investment here. What this does is gives the whole industry confidence to keep investing and to keep building the jobs for the future.