The Hunter's emerging hydrogen industry may never achieve the same export scale as the fossil fuel industry without the implementation of effective industrial policy settings, a new energy report warns.
The Deloitte Economics report Australia's Hydrogen Tipping Point argues that, despite ambitions to become a clean energy superpower, Australia's global competitiveness is rapidly declining.
"Our future is not just ours to make but for others to take," the report says.
A national energy ministers' roundtable will be held at Pokolbin on Friday.
The potential for hydrogen to play a major role in the Hunter's emerging clean energy economy has been well documented. Planning is under way for the creation of a Hunter hydrogen hub at the port of Newcastle and Fortescue Future Industries and AGL are undertaking a feasibility study into a green hydrogen manufacturing facility at the Liddell Power Station site.
The report says Australia's declining competitiveness is, in part, being driven by higher domestic renewable electricity prices but also by the "decisive policy action" of its competitors.
The US Inflation Reduction Act is the most visible of intervention.
"We estimate that if Australia does not respond to the IRA, we could export 65 per cent less hydrogen p.a. by 2050 than before the IRA's introduction, with scaled production delayed until after 2030," the report says.
"This could mean that renewable hydrogen never reaches a comparable scale with our current fossil fuel exports, with implications for our balance of trade and clean manufacturing aspirations. Industry policy is changing, and Australia must respond."
The analysis suggests the production of green hydrogen at about $2 per kilo would be the ideal point for government intervention.
The price point, about half the level of maximum credit of in the IRA, reflected Australia's underlying comparative advantage.
This would require public investment of $15.5 billion in today's terms over a decade.
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