ROSS STEVENSON: Hydrogen industry hubs are being set up across the country by National Energy Resources Australia to capitalise on an emerging business opportunity in what is being touted as a global clean fuel burn. We're grateful for the time of Angus Taylor, Federal Energy and Emissions Reduction Minister. Minister, good morning to you and please, this is not a deliberately stupid question, it is a question asked genuinely. What is hydrogen and where does it come from? 

ANGUS TAYLOR: Good question! Thanks for having me, guys. Look, hydrogen is a source of energy and an input for manufacturing. It's widely used now in a number of applications, the largest of which is production of fertiliser, so much of the food we eat every day is a result of the production of hydrogen. There's potential to use hydrogen for a much broader array of things like putting it into our generators for generating electricity, for transport and other applications. Right now, it's largely made by gas, by methane, but there's potential to make large quantities of it from water through a process called electrolysis. So, and that means it will be lower emissions and there's potential to move hydrogen to lower emissions over time. So, it's a really interesting fuel source and really critical for manufacturing of really important products like food, as I say. 

RUSSEL HOWCROFT: Minister, presumably you need a tonne of energy to create hydrogen out of water. So, what energy do you use to-

ANGUS TAYLOR: You certainly do. You need a tonne of energy to create hydrogen from anything. 

RUSSEL HOWCROFT: Right. 

ANGUS TAYLOR: So gas, of course, is a source of energy and electrolysis uses energy to make water into hydrogen. That energy needs to come from somewhere - it can come from solar, it can come from wind, it can come from traditional energy sources like coal and gas. So, wherever you've got energy you can create hydrogen. And hydrogen can be stored, it can be transported and it's a good fuel source to be able to move around and use as a feed stock not just for manufacturing, but for your whole energy system. So, very interesting as we're looking to bring emissions down, critical for manufacturing, great opportunity for Australia. And we are, as Federal Government, investing significant money - $570 million - behind hydrogen. 

ROSS STEVENSON: Right. When you say, Minister, it's cleaner - is it like 5 per cent cleaner or 80 per cent cleaner? 

ANGUS TAYLOR: Depends on your starting point, but it can be 100 per cent cleaner. And if you're using electrolysis and you're using wind and solar from electrolysis, it is 100 per cent cleaner - so, it's zero emissions at that point. 

RUSSEL HOWCROFT: So, Minister, am I right? Picture in mind, BMW has got a hydrogen powered car in the market already? 

ANGUS TAYLOR: Yes. So, what you're starting to see is new applications for hydrogen, and this is the point I made earlier - in transport, in electricity generation - which hasn't been where hydrogen has been used in the past. Transport is one of them. The Japanese, in particular, have been pioneers of hydrogen cars. You're starting to see the Europeans move to this. But look, the biggest investments in transport are in heavy vehicles. So you're seeing companies now looking at hydrogen for mining trucks for instance. There's a lot of work going on there. But, we're also starting to see it in the car industry as well, as you pointed out. 

ROSS STEVENSON: When you mention, Minister, that you can make it out of water, right, sea water? 

ANGUS TAYLOR: It can be sea water, but you've got to take the salt out, obviously. I mean, water is H20- 

ROSS STEVENSON: Well, you'd need a desal plant?

ANGUS TAYLOR: So, there's hydrogen in it and so, you just take out the oxygen - that's effectively what you're doing. So, yes, it can be sea water. But, it has to be desalinated to do that. 

RUSSEL HOWCROFT: So, Twiggy Forrest did a speech - was it last week? Saying that Australia's got the opportunity to be like a global hydrogen powerhouse. Is that a hyperbole or accurate? 

ANGUS TAYLOR: No, we think there's a really great opportunity here. It's going to take time, we're not going to do it overnight, but the Government is absolutely committed to get this industry moving in this direction. As I say, we've always produced a lot of hydrogen for fertiliser. Our farmers use nitrogen based fertiliser which is from hydrogen in a very large quantity now. When you're eating your breakfast this morning, it's because of hydrogen. You can eat that much because of hydrogen. 

ROSS STEVENSON: Nice, Minister. 

ANGUS TAYLOR: So you know, we're already there but there's potential for us to become a major exporter because of our ample sources of energy - traditional energy sources, as well as the lower emitting solar energy, for instance. 

RUSSEL HOWCROFT: Got it. Minister, grateful for your time. Angus Taylor, Federal Energy and Emissions Reduction Minister.

Media contact:

Minister Taylor's office: 02 6277 7120