In March, the Queensland University of Technology made history when it achieved the first export of a small quantity of clean, green hydrogen produced in Australia from renewable energy, to Japanese energy giant JXTG – proving that it was in fact possible.

Hydrogen is increasingly being seen as an alternative to LNG and other fossil fuels and Australia has a lot to gain from a new export industry, with companies such as Woodside Energy and Siemens already investing.

Each year the world consumes 55 million tonnes of hydrogen, a figure which is expected to increase dramatically over the next decade. As countries such as Japan and South Korea embrace hydrogen to rapidly decarbonise their economies in response to climate change, global demand is expected to rise by eight million tonnes as of 2030 and about 35 million tonnes by 2040.

While hydrogen is used in the manufacture of glass, steel and fertiliser, the greatest demand is likely to come from its use as a fuel for hydrogen-powered electric cars, long-haul heavy transport and public transport such as buses.

And while Australia may not be able to make those vehicles, it has the potential to become a primary producer of hydrogen. The only thing holding it back is the pace at which it embraces the technology and build its industrial capacity over the next few years.

So far, the main roadblock has been political will. This seemed to have been resolved in February when the Coalition announced it would hold public consultations on establishing the new industry before the next election.

Labor has likewise set aside $1bn in funding for the Clean Energy Finance Corporation to develop clean hydrogen technologies and an additional $90m for the Australia Renewable Energy Agency for research.

Support for a clean hydrogen industry has been a long time coming. In August 2018, Dr Alan Finkel, Australia’s chief scientist, released a National Hydrogen Roadmap spelling out how Australia could develop a hydrogen export industry.

Finkel’s plan was adopted by COAG and the 30 companies currently working on hydrogen projects in Australia knew they had a future.

Dr Fiona Beck, a theoretical physicist working with an ANU team recently awarded $10m in funding to conduct holistic research into setting up a hydrogen export industry in the Asia-Pacific, compared the current state of hydrogen to the early days of solar.

“With hydrogen, there is really the feeling right now that it’s not just researchers and technologists talking about this. There is the alignment. The perfect storm,” said Beck.

She said in the past hydrogen faced objections from people who said it just was not possible. Like solar, the technology had been around since the 1970s, but it was only with a growing awareness of climate change and the need for a transition that the technology started to receive more attention.

A hydrogen powered bus is refuelled at a depot in London. Photograph: Graeme Robertson/The Guardian

Broadly, there are currently three ways to make hydrogen. Brown hydrogen is is produced when the element is stripped out of fossil fuels such as coal, while blue hydrogen is produced from gas. Green hydrogen is produced from running an electric current through water using an electrolyser powered by renewable energy such as solar.

While the current policy focus has been on the production of blue hydrogen, the technology needed to produce, store and transport green hydrogen at scale is improving rapidly.

Among industry titans, Woodside Petroleum chief executive Peter Coleman said blue hydrogen is currently the cheapest to produce and, while he didn’t see exports reaching scale until 2030, the company was already planning ahead.

“The technology is ready today but has not been widely deployed in Australia,” Coleman said. “We view hydrogen production and export as a potential adjacent activity to our core business of LNG. We are also ideally placed to produce hydrogen in the north-west of Australia, where we have access to abundant sunshine for solar power.

“Blue hydrogen is the key to building scale and lowering costs in hydrogen transport and distribution, which will enable an earlier transition to renewable green hydrogen, produced through electrolysis of water, powered by renewables. The earlier we can shift, the faster we can reduce emissions.”

Martin Hablutzel, the head of strategy for Siemens – which manufacturers electrolysers, the main equipment needed to make zero carbon hydrogen – said the company welcomed bipartisan support for the industry and said demand for the company’s equipment is growing.

“What we need now is for Australia to fast-track green hydrogen projects of scale and governments to have a clear role in supporting this great new industry as it establishes,” Hablutzel said.

Where once their electrolysers were only capable of turning kilowatts of renewable energy into clean hydrogen, the company is now building larger scale devices.

Siemens will soon deliver a unit with a 1.25MW capacity to the Tonsley Innovation District in South Australia. It also offers another unit capable of scaling up above 10MW, with plans for newer equipment capable of producing into the triple digits.

Other companies aren’t waiting either. Yara Pilbara operates a fertiliser plant on the Burrup Peninsula in Western Australia’s far north and is racing to commercialise hydrogen production in partnership with French company Engie. Hydrogen is a key ingredient in fertiliser and general manager Chris Rijkson says the company sees it as a way to decarbonise its range.

While the original plan was to build a test-site, about a year ago Yara Pilbara chose to skip straight to building a full-scale 100MW solar-powered commercial-scale green hydrogen plant with a 66MW electrolyser. If successful, it would be the first in the world.

“[With this] we could make our whole product portfolio carbon-free in the future,” Rijkson said. “On top of that, Yara is looking into what other options there are to produce fuel in the future.”