One of Australia's biggest banks says the nation can still be a hydrogen leader. 

Australia's plans for a thriving green hydrogen sector have faced a temporary setback due to the US Inflation Reduction Act (IRA), but industry experts are confident that the nation's policies, funding support, and demand from Asian trading partners will propel it forward.

According to Aaron Ross, ANZ's Global Head of Project and Export Finance, and Nick Easingwood, Head of New Energy Corporate Finance, Australia's hydrogen sector, based on renewables, possesses the necessary policy backing and natural advantages to succeed. 

They acknowledge that the generous incentives of the IRA might draw capital to the US but assert that Australia remains a key player in the transition to low-carbon energy.

“I do see a shift towards the US under the IRA, but in terms of what we're hearing from our customers, they're still moving ahead, and Australia is still key,” Easingwood says.

Ross says there is strong interest from export credit agencies in countries like Japan, South Korea, China, and Singapore to finance projects that drive the transition to low-carbon energy. 

While ANZ has not yet formally committed to supporting a green hydrogen project, Easingwood anticipates deals in the near future. 

Conversations are allegedly underway regarding the feasibility of projects and the intricate financing required along the hydrogen value chain.

Offtake agreements, vital for project viability, are emerging as a key concern. 

Easingwood notes potential options include fertiliser production in Western Australia, peaking power generation in South Australia, and green fuel for shipping companies.

The executives lauded Australia's federal government for its $2 billion Hydrogen Headstart scheme, which bridges the cost-sales price gap for green hydrogen projects. 

However, they say long-term offtake agreements are needed alongside such initiatives for securing financing.