Off a busy highway outside Seoul in South Korea, there is a large refuelling station unlike any I've seen in Australia.
There are the typical petrol and diesel pumps as well as a very high-tech looking set of bowsers for electric vehicles (EV) with plasma screens showing how much power is being pumped into each EV.
But it's the small, lone pump off to the side, that stands out. Among the Korean writing, the "H2" written on it is clear to see.
It's one of a couple of hundred hydrogen fuel stations dotted throughout South Korea and a signal of where one of Australia's largest trading partners is turning its energy focus.
South Korea's 100 per cent renewable energy by 2050 target has businesses in the industrialised nation, known for its large manufacturing sector, looking for alternative energy.
It imports 90 per cent of its power, and Australia is a critical partner in that transfer of energy.
In 2021-22, South Korea spent more than $24 billion importing Australian coal and gas.
"The Australia/Republic of Korea partnership has never been more important," Australia's ambassador to South Korea, Catherine Raper, explains from the embassy in Seoul.
"We are both natural partners and necessary partners and peers.
"Economically, we have in 2022 in preliminary figures, seen Korea rise to the status of being Australia's third largest goods trading partner, and we're number five for Korea.
"So it's a deep and substantial and highly complementary economic relationship, underpinned by a very successful free trade agreement that has seen trade double over the course of that FTA."
It's a relationship that has primarily been based around fossil fuels and as each nation works towards its own climate targets, business leaders in South Korea want the partnership to strengthen.
Korea needs Australian hydrogen
Companies like Korea Zinc, the largest zinc refinery in the world, have signed up to RE100, with ambitions to be completely renewable energy powered by 2050.
Korea Zinc refines a number of metals that go into making batteries, including zinc, copper and lead.
But refining those metals is a power-hungry process and as a resources and energy importer, it's relying on its suppliers to make the energy transition too.
"Without Australia, we can't make Renewable Energy 100 by 2050," explained vice president of Korea Zinc, Ki-Jun Kim.
"So Korea Zinc, the business you can see, that in Australia, we'll make your green hydrogen there and it will be transported to Korea to make our battery materials business in Korea."
Korea Zinc's Australian business, Sun Metals, owns Ark Energy, which is building a green hydrogen plant in Townsville.
Once at capacity, Korea Zinc hopes to ship more than 500,000 tonnes of hydrogen a year from Queensland to Korea to power its factory.
It will also on sell excess energy to other Korean users.
"Compared to our Korean peninsula you [Australia] have huge amounts of land available with very low expense and also the Australian Government has really confirmed that in the near future instead of exporting just coal, you want to export green hydrogen," Mr Ki-Jun noted.
"There are some incentives and further encouragement for the research and development program sponsored by the Australian Government.
"There is a big opportunity for Korean Zinc and our Australian subsidiary Ark Energy, that's the reason why we are really serious in pursuing our two green metal projects in Australia."
Budget bonus
Last week's $2 billion Hydrogen Headstart budget commitment is a further signal of where the government sees the energy transition heading.
Fortescue director Elizabeth Gaines told ABC program The Business it's a welcome first step.
"It's a great signal that the government is taking the energy transition seriously," she said.
"If I contrast that to the inflation Reduction Act in the US that was introduced late last year, that's a $369 billion support package."
Ms Gaines hopes to see more from the government, in time.
"There is a crisis, an energy crisis, and there is demand and we're already seeing that," Ms Gaines said.
"We have partners in Germany who are seeking five million tons of green hydrogen as quickly as they can."
Fortescue has invested about $1 billion through its Fortescue Future Industry business to develop greener ways of doing business, be that mine trucks and even train haulage powered by hydrogen.
Part of that investment also includes its ambitions to build a hydrogen electrolyser factory in Gladstone.
"I certainly see a future where hydrogen and the export of renewable energy will be as important as iron ore, other commodities and LNG have been to the Australian economy," Ms Gaines said.
Transporting hydrogen isn't easy
"The whole transport story is one that's going to be the biggest challenge for hydrogen," said CBA's mining and energy economist, Vivek Dhar.
One way to move the gas hydrogen is by converting it into a liquid, which only occurs when it's cooled to about minus 250 degrees Celsius.
Keeping it at that temperature isn't easy, especially when it's being transported long distances in a ship.
Hydrogen gas can also be converted into ammonia for transport, and while it doesn't need to be cooled as much as liquid hydrogen, it also faces challenges.
"There are notable energy losses in conversion to say something like ammonia which hydrogen can be converted to and then sent across the sea," explained Mr Dhar.
"But if you send it as liquid hydrogen there are even bigger penalties in terms of energy loss, because you have to cool it so much.
"So, in terms of how the transport of hydrogen by sea looks like, I think ammonia is going to be the main pathway.
"But it is certainly still not fully determined that that's the best one."
In Ulsan, the centre of hydrogen and technology in South Korea, there are a range of research projects underway, supported by the Korean government funded Ulsan Technology Park.
It wants a greater transfer of research and development between South Korea and Australia to solve some of the challenges, like transport, in using hydrogen as an energy source.
"I think Australia can be a big supplier of hydrogen to Korea," explained Ulsan Technology Park director general Rhee Hanwoo.
"I suggest we co-operate in terms of shipbuilding and mass production of ammonia to supply Korea."
Using hydrogen to value add in Australia
Some Korean businesses want to use Australian hydrogen in their operations locally, rather than look to exporting the gas in one form or another.
POSCO, Korea's largest steel maker and Australia's biggest iron ore customer, has been granted land by the Western Australian government to create a hydrogen fuelled plant in the Pilbara.
The plant would use hydrogen power in the energy intensive process of refining WA iron ore into hot briquetted iron (HBI), which are pellets of refined iron ore that can then be shipped to POSCO's steel works on the peninsula.
Using hydrogen energy so close to its source in the Pilbara eliminates the transport logistics of moving both the hydrogen and the iron ore on ships to Korea.
"I actually think that's the big opportunity that hydrogen presents Australia," Mr Dhar said.
"Given the challenges to transport hydrogen by ship, we actually have an opportunity to do more value-add processing onshore, and then export that product.
"I think iron ore and converting it to iron is certainly one of those sectors that has enormous potential in terms of that value-add processing."
He notes a lot more work is needed to determine the best commercial and logistical uses of hydrogen.
"There are a lot of options on the table, people are finding out their favourites, but in terms of commerciality, there's still a lot of work to be done before we have a clear winner emerge," he said.
Could hydrogen be the new mining boom?
Modelling by Commonwealth Bank's economics research team shows $260 billion worth of hydrogen projects are in the pipeline, significantly more than any other industry like iron ore, coal, or oil and gas.
Mining and energy projects in Australia — feasibility stage | |||
|---|---|---|---|
Commodity |
Number of projects |
Value of projects ($ billion) |
Share of total committed investment |
Hydrogen |
24 |
118.6 |
40% |
Oil & gas |
18 |
56.9 |
19% |
Coal |
33 |
47.6 |
16% |
Iron ore |
15 |
24.7 |
8% |
"But how much of that makes it to actual investment is now the big question," Mr Dhar said.
About 60 per cent of the publicly announced projects in Australia's resources sector, and 40 per cent of projects at the feasibility stage, centre around hydrogen.
Mining and energy projects in Australia — publicly announced | |||
|---|---|---|---|
Commodity |
Number of projects |
Value of projects ($ billion) |
Share of total committed investment |
Hydrogen |
22 |
147.4 |
60% |
Coal |
18 |
18.1 |
7% |
Iron ore |
11 |
23.8 |
10% |
Oil & gas |
11 |
19.0 |
8% |
"It's a massive proportion of what's coming out and that's going to be one of the big stories in our view," Mr Dhar said.
"If we are going to see another mining investment boom in Australia, similar to what we saw with the China boom, we would likely need to see hydrogen projects get up and running."
He saidsecuring commercial partnerships, like those with partners in Korea, are critical to the success of a hydrogen industry in Australia.
"When we talk about what is needed to get export projects up and running, and that's what the Hydrogen Headstart program, in our view is really trying to achieve, then you're really talking about offtakes.
"If Korea and Japan can offer those offtakes, alongside say Europe, then that would actually kickstart a number of export projects in Australia."
Rachel Pupazzoni visited South Korea as part of the Australia-Korea Media Exchange Program organised by the Walkley Foundation.
