Can Australia win the $1.4 trillion global hydrogen race?

Here's what the future could hold for Australia's hydrogen industry.

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Key points

  • Australia could be set to hold a prime position in a $1.4 trillion global export industry, according to Goldman Sachs
  • The nation's access to natural gas and renewable energy could be the crux of its hydrogen export industry – which could be a major international trade in the future
  • Fortunately, plenty of ASX shares are already working within the hydrogen sphere

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.

Of course, the most notable is Fortescue Metals Group Limited (ASX: FMG) and its green energy leg, Fortescue Future Industries (FFI).

It's creating a major electrolyser manufacturing facility in Queensland, as well as engaging in green hydrogen production and hydrogen-fuelled transport initiatives.

Meanwhile, Hazer Group Ltd (ASX: HZR) is working to create hydrogen and synthetic graphite using its HAZER Process.  

Province Resources Ltd (ASX: PRL) is one step ahead with its HyEnergy Project, creating green hydrogen in Western Australia.

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.

Other ASX shares involved in hydrogen include Pure Hydrogen Corporation CDI (ASX: PH2) and Sparc Technologies Ltd (ASX: SPN).

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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