From Sports Media. I'm Daniel James. This is seven am. When Tim Buckley was in Shanghai last month looking at electric cars, what he saw amazed him. He saw cars capable of traveling one thousand kilometers between fast chargers and thousands of sites where batteries could be swapped out in minutes. Buckley is a climate finance guy, so he knows evs and he came back sure that this new generation of vehicles held the answers to all the problems that have
plagued the industry. He was convinced of something else as well. Hydrogen cars are dead. And it's not just Buckley who's gone colon hydrogen. Andrew Twicky Forrest has just announced he's scaling back his own hydrogen projects. Once sold as the silver bullet that would hasten the end of Australia's dependence on fossil fuels, hydrogen has now become an expensive and
heated point of political debate. Today, National correspondent for the SAT Day Paper Mike Secam on why so many people went all the hydrogen and why so many are now walking away, raising questions about whether it has a future at all. It's Thursday, August onan.
Mike. What was the promise of hydrogen power, Well, it was promising almost everything. I mean, people called it the Swiss Army Knife of energy sources. And you know, you can see why people were enthusiastic. Hydrogen is the most abundant element in the universe. It powers the sun, powers the stars, it's non toxic. There's apparently an infinite supply of it if we can find a way to produce it in an environmentally sustainable way. The promise was very big in a world.
Verse two cars powered by hydrogen derived from ammonia hit the road in Queensland. Industry leaders say the breakthrough by the CSIRO could see Australia become a renewable energy superpower because the changing technology will allow the carbon free fuel to be shipped safely anywhere in the world.
Only five years ago we produced our first national Hydrogen Strategy, presented to the government by Australia's then Chief scientist Dalan Finkel, and it foresaw hydrogen being used not only to power vehicles, but for home heating and cooking via the gas reticulation network, as a means of storing electricity generated by wind and solar and providing an alternative to fossil fuels for base load power. So they had a big future mapped out for it.
Firstly, Allen, thanks to you for championing hydrogen as an agenda as part of Energy's Australias energy transition. There's lots of cynics along the way, and maybe Allen would even agree he was a cynic.
And as the report said, it is quote flexible, safe, transportable and storable, and it could be piped around the nation and exported around the world to quote hydrogen hungary unquote countries. And it went on to make the promise that Australia could become the leader in the new industry of shipping sunshine. As Finkle put it, at the time, the future looked very bright about five years ago.
And one of hydrogen's most ardam supporters was Andrew Forrest. What were his plans for hydrogen?
Well, his plan was basically to export it to the world. You know, he saw a huge, huge potential for an export industry.
All through Japan, through Europe, through Asia, China. We're speaking to all the big players and convincing them no longer is there an excuse that yeah, we'd really love to use green hydrogen, but we have to use fossil fuel. And I'm saying no, the time has come. Green hydrogen is going to have its day and the world will never go back to the rubbish bin. This is a multi generational change, This is a forever change.
He also thought, of course, as a way to decarbonizing his mining operations. You know, he's a big guy on or minor Ford deesku Is. His company invested I think
around one point one billion dollars in major projects. In twenty twenty one, he announced partnerships with verious state and federal governments to help with the transition at R and D, and he set a target of producing fifteen million tons of hydrogen by twenty thirty and last year he was on stage in Morocco sprooking it still saying that you know, he was a big believer in batteries, but any person who said that hydrogen didn't have a role was a quote muppet unquote.
I'm a huge believe in batteries, but any muppet he says hydrogen doesn't have a role is a muppet.
And he repeated it just in case anyone didn't hear it the first time.
To make sure that everybody got that.
That's a Muppet show on stage.
So you know, he basically threw down the gauntlet. Said, I'm saying to anyone, including Elon Musk, you know, whoever you like, whoever says hydrogen hasn't got a massive future, was and he said it a third time a Muppet.
Elon is the Muppet.
I'm saying, anyone including Elon in adding herve you like, who says hydrogen hasn't got a massive future a Muppets.
And he was probably bullish for a reason because he wasn't alone in thinking that hydrogen was the way of the future. Industries and governments around the world has started to invest. So what are the Australia's plans for it? Now?
So the government is supporting it. It's got something called the Hydrogen head Start Plan, which will provide four billion dollars in support of selected large scale renewable hydrogen projects which have not yet been enumerated, and it has budgeted a further six point seven billion and maybe more in production credits for any projects that actually get off the ground. But now a lot of players are changing their tune. Alan Finkel, he tells me, now that a number of
the newses they foresaw for hydrogen have proven impractical. You know, hardly anyone outside the gas industry, for example, now sees any future for hydrogen as a substitute for natural gas
in home heating and cooking. Tim Buckley, director of Climate Energy Finance, who has been a big advocate of hydrogen in the past, has just come back from China where he saw amazing developments in electric vehicles, and so he came back convinced that hydrogen cars will go the way of the Dodo and probably also you know, hydrogen heavy transport. So there's a couple of big changes of emphasis there.
And of course a week ago Andrew Forrest, the biggest booster of all, announced that he was scaling back his commitment to hydrogen as well.
After the break, has the green hydrogen dream evaporated? Mark the turner aund in support for hydrogen has been swift. Can you tell me why that is? What's changed?
Sure? Put, simply a lot of people got it wrong. I spoke to the director of the think tank Climate Energy Finance, Tim Buckley, who admitted as much, and he said the reason he was so excited about hydrogen was that he thought it was going to get a lot cheaper to produce. I mean to explain how it's produced. What happens is you have to split water molecules that's H two O by electrolysis, which is essentially by the use of electricity, into hydrogen and oxygen, and that is
quite an energy intensive process. They were going to do it with the use of cheap wind and solar, And if I might quote him, he said, five years ago, I was projecting solar to cost twenty to thirty dollars per mega what our and wind likely to be fifty to seventy dollars per mega what hour. But we're now talking about solar at sixty dollars per mega what our.
That is two to three times as much as he had hoped, and win by probably around twice as much as he had hoped by twenty thirty and the cost of electrolyzers hasn't come down by anything like the amount that it was forecast to. So simply put, you know, a lot of people got carried away with the hype around hydrogen, and the basis for that was that they thought it was going to be a lot cheaper to
produce than it looks like it will be. And of course, about a week ago, Forrest announced that he was walking away from his goal of producing fifteen million tons of hydrogen per annum by twenty thirty.
Fordeskew has announced it will cut seven hundred jobs by the end of the month as part of a restructure. The mining giant has also abandoned its green hydrogen production targets by twenty thirty.
The problem that has been cited by him is that electricity prices are just too high still, and so he announced that he was in fact moving his emphasis upstream, that he was now going to focus on the production of renewable energy from sun and wind.
The cost of energy is high being forced on us around the world. There's no green hydrogen without very competitive cost of electricity.
Of course, when Forest made his announcement, the renewable energy skeptics in politics and the media all piled on.
It was about time. The whole project has never made sense.
It was just always stupid to bet the house us on hydrogen.
Well, look, he's woken up the reality.
Particularly members of the Federal Coalition for a couple of reasons. One, they have long had a very prickly relationship with forrest. He has described the coalition's plans to build nuclear reactors as and I'm quoting him here, bulled ust policies of politicians masquerading as leaders.
Misinformed, unscientific, uneconomic, plucked out of their thin air. Bull dust of nuclear policies of politicians masquading as leaders help no one.
And he's accused them of dividing us with false hope that we can cling to fossil fuels. So he's got stuck right into them, and obviously they don't like that, so they saw his announcement as an opportunity to use him as a means of attacking the Labor government and its support of the nascent hydrogen industry.
Labour has to stop its anti gas cruside.
We need more gas. We needed a meeting.
So Ted O'Brien, the opposition spokesman for climate change and energy, came out with a media statement saying that, and I'm quoting here, Twiggy's abandonment of green hydrogen has blown a gaping hole in the Albanese Labor Government's energy plans, he said, and it continued. Despite offering billions in taxpayer funds to these projects, they are still failing to get off the ground.
With the collapse of Labour's green hydrogen plan, our energy security is under serious threat as the government continues to force ninety percent of Australia's twenty four to seven reliable baseload energy out of the grid over the next decade.
So that's what the coalition has said, Mike. They've called the scaling back by Fortescue and others as a superflop as well. Is there any truth in their characterizations of what's going on here?
Well, there is a tiny soups on of truth, I guess, but you would have to say that even by the tendentious standards of Australia's climate war, was O'Brien's release was exception in its misrepresentation of the facts. For a start, Labor is not forcing baseload energy out of the grid. What's happening is coal plants are closing because they're old, they're breakdown prone and they're uncompetitive with renewables. So that's
the story there. Second point, Forrest has not abandoned green hydrogen at all, although as mentioned, he's decided against following through with a couple of things. He's not going to be going ahead with a memorandum of understanding with the energy company AGL to make hydrogen at the site of the old Ladell coal power station near Newcastle. But his company remains committed to several major projects in the United States, in Norway, in Brazil, where he has access to cheaper electricity.
His company is also pushing ahead with an electorallyzer plant in Gladstone and Queensland and a pilot plant in the Pilbra which aims to begin producing green iron from next year. So, in other words, they will use hydrogen to refine iron or turn it into iron, and then ship that much more valuable product. Furthermore, Forrest's company was never in line
for any funding under the hydrogen Headstart program. The government has yet to decide who's getting money under the program, so far from having collapsed, it hasn't even started yet.
So Mike, where does that lead the government's hydrogen plan. It's full billion dollar hydrogen plan. If the market walks away from hydrogen, does that undermine the government's plans on this, Well, it.
Would if the market was walking away. I'm not sure it is. I think the market is actually just walking in a slightly different direction. So the Energy and Climate Minister Chris Pohen has reaffirmed the government's commitment to hydrogen and the quote was reports of the death of the green hydrogen industry are greatly exaggerated, was the way he
put it. He claims that there are two hundred billion dollars worth of investment schemes in the pipeline, So there will be a future for hydrogen, possibly just a slightly different one.
So as things stand at the moment, the opposition has committed to nuclear, the government has committed to renewables, with hydrogen being a significant part of the mix. Mik, what does all this mean for the political debate on anychy polsy as we head towards the next election. Does all of this get us any closer than net zero?
Well, I mean, let's not be unduly negative here. Net zero is getting close. So we're putting in lots more wind and solar transmissions proving to be a bit of a problem. We're moving a bit slower than we should have. The prices of renewables are still too high, but progress
is meeting made. As for the coalition's plans for nuclear, it may be some experts tell me not all that you know a couple of decades down the track, there will be a niche role for nukes, but it's not the answer to everything, just like hydrogen wasn't the answer to everything. In any case, there's good reason to suspect that the coalition's nuclear plan is as much an active
sabotage as a climate policy. What it actually appears to be endeavoring to do is to keep us using fossil fuels for as long as possible, and even if that is in the outright intent, it is certainly creating a lot of uncertainty, which obviously investors don't like uncertainty. In the case of hydrogen, I guess we can say that the hype of some years ago has now been subject to a dose of reality. So, you know, we won't use hydrogen for a number of things we thought we might.
We won't use it for home heating and cooking. We probably won't use it for transport. But if we use it where we make it, it still has big potential for you know, turning iron or into iron balk side into a luma, for producing fertilizers, explosive things like that. But the prospects of you know, exporting it around the world and around the country. Those are not looking quite
as prospective as they were. So in a nutshell when it comes to hydrogen, things are not as good as promised, But nor are they as bad as they seem if you believe you know the opposition and the other naysayers.
Mirk, Thanks for your time, Thanks for yours. Also in the news today, Hamas says it's chief political leader, Ismael Hanier, has been killed in Iran during a raid on his residence. Hanier has been the face of Hamas's international diplomacy during the war in Gaza, where Hannie's family's home was destroyed in an Israeli air strike in November that killed several
of his family members. No one has yet claimed responsibility for the assassination, but suspicion immediately fell on Israel, and inflation in Australia rose to three point eight percent in June according to the latest figures. It comes ahead of the Reserve Bank's meeting next week where board members will decide on the official interest rate, which is currently four point thirty five percent. I'm Daniel James. Thanks for listening.