Thermochemical reactions drive the other two methods. One uses gas and the other uses coal or gas, and for one to be a source of clean energy, it requires carbon capture and storage to stop emissions from fossil fuels entering the atmosphere. These are known as blue hydrogen and are opposed by green and environmental groups because they still need fossil fuels to produce hydrogen.
Fossil fuels are key to producing steel from iron ore. Finkel said that producing enough green hydrogen to replace it would require solar energy to produce eight times the national level of annual electricity generation. The electrolysis process would also need to produce an additional 1 million megawatts. Last year, only 200 megawatts were produced by electrolysis worldwide.
So, the scale is enormous,” Finkel said. “But this is a great opportunity to look for an opportunity for partners like Korea to invest in Australia to help us build this industry.”
There are three people per square kilometer in Australia, Finkel said, compared to 527 people per square kilometer in South Korea.
“This land is an advantage for us to build on,” he said, referring to solar energy. “This is a difficult transition we are going through. It is not driven by normal market dynamics where one person comes up with one cheaper product and pays another.”
The alliance has preferred to pursue bilateral energy deals over international forums where it has been criticized for its record on climate change.
Prime Minister Scott Morrison spoke with new Japanese leader Fumio Kishida on Tuesday. The call readout said the couple were “keen to strengthen the economic partnership, including secure supply chains and clean energy technology such as hydrogen.”
Energy Secretary Angus Taylor said in the run-up to Glasgow, the collective focus must be on lowering the costs of new and emerging technologies to par with existing alternatives.
“No country can do this alone,” he said. That’s why Australia partners with countries like Korea, Japan, Germany, the United Kingdom and Singapore on low emissions solutions. “
The deal with South Korea could also help Australia gain a competitive advantage against other iron ore export economies in South America and Africa which are set to increase their exports in the next decade in key markets including China.
South Korea, along with Japan and all of Australia’s major trading partners, have committed to net zero emissions by 2050 or 2060. South Korean Ambassador Jeong Sik Kam said climate change has become one of the “most serious and urgent challenges of our time.”
“Countries around the world are scrambling to find the optimal situation where they can better protect the environment and, at the same time, keep the economy growing,” he said.
The impending structural change for the Australian economy is the transition to a low-carbon economy, said Thomas Rodgley, an economist at Oxford Economics.
“A prolonged period of political inaction has left Australia relatively behind among advanced economies in adopting lower net emissions targets,” he said.
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