As Australia moves toward decarbonisation across all of its sectors, the production and use of clean hydrogen have emerged as a clear alternative. It is versatile, storable, transportable and, ultimately, a fuel source that is carbon free. Funding and policy announcements across State and Federal Governments for the hydrogen industry have built momentum in recent years, with projects already underway to address new uses for hydrogen, which are looking to improve the economics of production to meet the expected future demand not only here in Australia but also internationally. So, how can Australia lead the global shift to hydrogen and what is the regulatory and fiscal infrastructure needed to drive the development of the hydrogen industry in Australia? The key issues to be considered include the following: The need for government funding for development of the future uses of hydrogen to help build confidence and stimulate investment across the supply chain to enable commercialisation; Establishing an attractive investment environment for projects in Australia – not only the production of hydrogen but also for the supply chain infrastructure; Development of a certification scheme and Australia’s role in setting regional and/or international standards and Policy settings, including the necessary regulatory and fiscal reforms, relevant to support the period of transition to green hydrogen.

The development of LNG project infrastructure for exclusive use in relation to LNG projects in Australia has placed an enormous strain on and demand on human and manufactured resources. It has undoubtedly contributed to project delay and cost blow outs, and these have had an effect, along with the falling price of oil and LNG, of putting in jeopardy the development of further LNG projects in Australia. Tie-ins and joint development may be one way to de-risk and enhance the economic viability of developing future oil and gas resources through the following means: reducing project delays by using existing developed facilities without the need for extensive pre-FEED and FEED work; reducing the number of government approvals required by using existing facilities that already have relevant government approvals; reducing the unit cost of production by using underused facilities or expanding existing facilities at a marginal additional cost to cater for the additional demand and use; and, reducing exposure to workforce related issues, which have adversely affected the LNG projects in Australia, including unionised workforces, skill shortages and occupational health and safety risks. There are some key issues however, that need to be considered before embracing this approach, which includes: Capacity—the availability of capacity in existing infrastructure which is constructed with an individual project in mind will need to be assessed. Distance—the geographical location of projects can be prohibitive, unlike in other jurisdictions such as the UK North Sea. Loss of control—operators and the majority of participants may no longer be able to dictate development programs and project schedules. Pre-FID work—the access agreements need to be finalised and agreed pre-FID and will need to be front-ended at a time when not all issues are foreseeable. Tolling price—the price needs to be reasonable, yet reflective of the risk taken by the asset owner in allowing third party access and relinquishing some control. The author will explore these considerations and how some of these issues can be addressed in legal matters, as well as the way other jurisdictions have sought to use infrastructure sharing arrangements and the different ways government has influenced infrastructure sharing.