These regions – the Pilbara, Kwinana, the Hunter and Gladstone – have all been identified as potential hydrogen hubs under Australia’s National Hydrogen Strategy and offer the potential of large-scale demand clusters. Switching all of Australia’s current ammonia production away from gas would create demand for around 350,000 tons of green hydrogen.
However, the report finds that progress is currently slow. Widespread adoption is being hindered by relatively high production costs for green hydrogen, a lack of demand at premium prices, and insufficient policy drivers.
With more than half of Australia’s ammonia used to produce explosives, miners wield significant influence and could play a pivotal role in accelerating the transition to green hydrogen and ammonia. According to IEEFA’s analysis, shifting to green explosives would be affordable for miners: switching to 20% green ammonia by 2025 would increase their operating costs by less than 0.1%; while a complete switch to 100% green ammonia by 2030 would increase costs by a maximum of 0.4%.
A planned expansion of CSBP’s ammonia plant in Kwinana, Western Australia, presents a powerful opportunity to demonstrate the large-scale integration of renewables and green hydrogen in the domestic ammonia supply chain. Under current proposals, the expanded plant would be fueled by gas. However, if the expansion was based on green hydrogen instead, it could create demand for about 53,000 tons of green hydrogen.