Australia – and, perhaps as an extension, the ASX – could set to be a major player in the global hydrogen industry.
Goldman Sachs predicts our island home could tap in as a key exporter of the commodity.
Additionally, it expects the hydrogen market could be worth more than US$1 trillion ($1.4 trillion) by 2050.
Let's take a look at what might be in store for Australia's – and the ASX's – future in the green hydrogen space.
Could Australia host a prime spot in a $1.4 trillion industry?
According to analysts by Goldman Sachs, Australia could be up against regions including the Middle East, North Africa, and Latin America in the race to supply hydrogen to potential major importers in Central Europe, Japan, Korea, and East China.
And we're going about it differently than other regions.
Australia's hydrogen strategy focuses on its ambition of becoming a global hydrogen hub – using its natural gas and access to low-cost renewable power to produce the energy commodity.
Australia's hydrogen industry is expected to ramp up from 2025, alongside that of Latin America, Europe, and Africa.
However, Australia and Europe have the lead in planned electrolyser capacity additions. They also offer the most funding for green hydrogen projects, such as those in the sights of many ASX shares.
Australia's National Hydrogen Strategy aims to place the nation as a key hydrogen exporter by 2030.
Looking to the future of the global industry, Goldman Sachs predicts up to 30% of hydrogen could be exported across borders – creating a new major international trade. For context, that's more than the amount of natural gas currently traded between nations.
It also believes the average size of hydrogen projects could increase more than 100 times over by 2025, while the cost of electrolysers needed to produce the energy commodity could drop 40%.
Making the case more exciting, the price of hydrogen could be par with that of diesel in long-haul heavy road transport by as early as 2027.
So, which ASX shares have the potential to be involved in the upcoming export commodity? Let's take a look.
What ASX shares are involved in hydrogen?
There are plenty of ASX shares already on the hydrogen bandwagon.
It's creating a major electrolyser manufacturing facility in Queensland, as well as engaging in green hydrogen production and hydrogen-fuelled transport initiatives.
Speaking of the HyEnergy Project, Global Energy Ventures Ltd (ASX: GEV) recently began a feasibility study looking at transporting hydrogen from the project to key markets in Asia using its propriety compressed hydrogen ship.