British Petroleum sees potential for green hydrogen and a green ammonia plant in the mid-west region of Western Australia. BP is planning on spending around $5 billion annually on low-carbon investments. Australia is a feasible location for large-scale production of green hydrogen because it has vast lands and abundant wind and sunshine.
The production of green ammonia and green hydrogen is technically feasible at scale in Australia. However, the process will require mega investments in services such as electricity, port, and water.
A study, supported by the Australian Renewable Energy Agency (ARENA), considered building a demonstration plant where an electrolyzer powered by renewable energy will split water to produce hydrogen. The hydrogen produced would then be used to make green ammonia. This facility would be able to produce 1 million tonnes a year.
There is a global push to save the environment by cutting carbon emissions. Australia wants to replace fossil fuels with green hydrogen. According to BP Australia President Frédéric Baudry, this eco-friendly move would position Australia as a regional powerhouse of the energy transition. Mr. Baudry also said that their study also confirmed that there would be strong demand from potential customers in the renewable technologies sector for both export and local markets.
Engineering firm GHD conducted the study and found that developing a hydrogen industry would need government support, including expanding ports, building transmission lines, setting emissions targets, and providing incentives. GHD has not given a cost estimate for a commercial-scale plant. The biggest obstacle to attracting investments is the absence of an emissions cap or carbon price in renewable technologies such as hydrogen, according to GHD.
The Australian government has declined to commit to net zero emissions by 2050 and has also refused to set a price on carbon. BP said that it would develop plans for green hydrogen and green ammonia projects with other companies in Western Australia. Japan’s Mitsui OSK Lines and Australia’s Origin Energy said that they would jointly study how green ammonia projects of Australia could supply markets from 2026.