Fuel-cell technology uses hydrogen from onboard storage tanks, combined with oxygen from air flowing into the car, to generate electricity that powers the car's engine. The Toyota Mirai is a hydrogen fuel-cell car. Toyota and other car markers developing this type of vehicle believe hydrogen fuel cells will be the automotive propulsion system of the future. They allow greater range than battery-powered hybrid cars, and, unlike internal combustion engines, produce zero carbon emissions. Their only waste product is water vapour. So what's the message for Victoria's coal industry?

Hydrogen can be extracted from brown coal, in a process known as gasification. This process, unlike hydrogen fuel-cell cars themselves, does generate large amounts of carbon dioxide. But there is work under way in Gippsland to deal with that problem. The carbon dioxide emitted in gasification is in a concentrated form, which many engineers believe is well suited to other emerging technologies, such as carbon capture and storage. A trial of this process, CarbonNet, is being conducted by the Victorian government and CO2CRC, a joint venture between industry, universities and other research agencies from Australia and overseas. Toyota and another Japanese company, Kawasaki Heavy Industries, have jointly expressed interest in extracting hydrogen from Victorian brown coal and shipping it to Japan to be used in fuel cells.

If the CarbonNet storage project is a success, it will raise the prospect of an environmentally safe future for brown coal. And that in turn means Victoria could have a leading role in the future automotive industry through development of hydrogen resources from the state's enormous reserves of brown coal. The Toyota/Kawasaki plan would require the building a large and expensive gasification plant and an export terminal. It would certainly generate jobs in a region that is sorely in need of them. The Mirai is a vehicle that suggests what is possible with alternative energy sources, and which demonstrates the extraordinary technological development of the automotive industry. When I was innovation and industry minister in Kevin Rudd's Labor government, I had talks with Toyota about building the hydrogen fuel-cell car here under the New Car Plan. But the Mirai won't be made in Australia now because the present government has done so much damage to the automotive industry. It hounded the car makers out of the country. But that does not mean everything that has been achieved is lost. What we had under the New Car Plan was a technology roadmap – for alternative technologies, electrification, and the use of gaseous fuels such as hydrogen.

Australia still has the capacity to be involved in the technologies of the future, through the work of designers, engineers and scientists in our automotive industry, in our universities, and in research agencies such as the CSIRO. Whether this industrial capability is maintained will depend on the role governments choose to play. I am confident Australia will have an automotive industry beyond 2017, but government policy will determine its size and scope. It will depend, for example, on whether governments choose to provide incentives for companies to develop technologies like carbon capture and storage, or to build manufacturing facilities for processing hydrogen fuel. Government must work with industry to preserve Australia's world-class automotive capabilities, attract new investment and create the jobs of the future. Victorian Senator Kim Carr is the shadow minister for Higher Education, Research, Innovation and Industry.