Hydrogen fuel technology was given a significant boost last week after one of Australia’s largest resource companies, Fortescue Metals Group (ASX: FMG), unveiled a landmark partnership with the Commonwealth Scientific and Industrial Research Organisation (CSIRO).
The partnership intends to advance hydrogen fuel applications in Australia and effectively kick-off a revolutionary new chapter in the Australian energy industry.
The announced partnership has been valued at around $20 million and will run for five years focusing initially on commercialising CSIRO’s metal membrane technology, which enables ammonia to be used as a carrier material for hydrogen storage and transport.
According to Fortescue, the technology will make “transportation of hydrogen economically viable, enabling the benefits of the low emission fuel to be realised.”
Small Caps first reported on the introduction of hydrogen fuel in September of this year, after the CSIRO unveiled the development of a method for bulk hydrogen to be transported in the form of ammonia, using existing infrastructure, and then reconverted back to hydrogen at the point of use.
If implemented, CSIRO’s ammonia-based method has the potential to fill the gap in the technology chain to supply fuel cell vehicles with low-emissions hydrogen sourced from Australia.
CSIRO’s vision could lead to the use of hydrogen as a fuel and the building of extensive infrastructure to supply pure hydrogen to consumers.
There are also larger macroeconomic impacts that could benefit the Australian economy. If the technology can be successfully field-tested in Australia, it could then be exported globally with Australia as one of the leading nations spearheading its advancement.
CSIRO chief executive officer Larry Marshall said that the partnership was “great news for Australia, not just through new industry creation and the jobs that will flow from it, but in contributing to a different energy future that is secure, affordable and sustainable.”
Fortescue was also highly optimistic about the deal.
“We are at the beginning of an energy revolution and Fortescue intends to be at the forefront of this once in a generation opportunity,” said Andrew Forrest, chairman of Fortescue.
From Fortescue’s perspective, the deal is likely to not only create significant commercial opportunities in the mid-long term, but also, demonstrates the resource giant’s commitment to reducing its carbon footprint given the significant efficiency improvements offered by hydrogen.
As a sign of Mr Forrest’s personal confidence in the company, the chairman has acquired almost 10 million shares in Fortescue on the market over the past two months, after adding 3.9 million shares in October and 5.8 million in November for a total of $38.2 million.
His stake in Fortescue now stands at just over 1 billion shares.
The boon of hydrogen
Hydrogen is highly abundant in the Earth’s atmosphere, which, if harnessed, could alleviate supply issues that plague existing sources of energy such as hydrocarbons.
Hydrogen is also a clean fuel that only produces water as its waste product – as opposed to carbon dioxide in the case of hydrocarbons, which is known to be pollutive and toxic to the environment.
Furthermore, hydrogen is highly adaptable which means it can be burnt like petrol or produce electricity in a portable fuel cell like a battery.
Last but not least – and possibly its biggest advantage – is that hydrogen can be generated using different methods, including the generation of electricity using renewable sources like solar.
“As a proud Australian company, we are excited to partner with CSIRO, our nation’s preeminent science and research body, to unlock the potential of hydrogen, the low emission fuel of the future,” said Mr Forrest.