What Is Green Hydrogen – And Why Is It a Big Deal?
To dispel any misconceptions, we’ll start off by saying that green hydrogen is not some new element or anything like that. It’s still hydrogen.
Hydrogen is a fuel, one that’s been used for decades in everything from rocket launches to fertiliser production. The difference now lies in how it's made.
Traditionally, hydrogen is produced using fossil fuels like coal (brown hydrogen) or natural gas (grey and blue hydrogen), releasing significant carbon emissions in the process.
But green hydrogen is a different story — it’s created by splitting water (H₂O) into hydrogen and oxygen using renewable electricity, a process called electrolysis. This results in a clean, flexible fuel that emits nothing but water vapour when used.
But what has people really excited is some of the challenges that green hydrogen can help us to solve.
See, Australia has a bit (actually, a lot) of an issue. Some of our biggest industries, accounting for a huge portion of our GDP, are among the most polluting on Earth. Think steel production, heavy transport, mining, and chemical production. These industries have proven very difficult to decarbonise so far.
That’s where green hydrogen comes in.
Unlike electricity, which can decarbonise homes and light industry relatively easily, green hydrogen offers a pathway to clean up the sectors that can’t easily switch to solar panels or batteries.
It’s also versatile. Green hydrogen can be used directly as a fuel, blended into existing gas networks, or converted into ammonia — which is easier to ship and can be used as a clean fuel itself or turned back into hydrogen at its destination. This opens the door to export markets like Japan and South Korea, who are actively seeking clean energy imports.
The Challenges Facing Green Hydrogen
Now, before we all start high-fiving our way to a carbon-free future, it’s worth acknowledging that green hydrogen isn’t without its hurdles.
The biggest one? Cost.
Right now, green hydrogen is much more expensive to produce than the fossil-fuel-based versions it’s hoping to replace. Electrolysers — the machines that split water into hydrogen and oxygen — are costly to build and run. When you add in the price of renewable electricity, adequate water supply (often from desalination), and the fact that hydrogen requires specialised storage and transportation infrastructure, the “clean fuel of the future” has a fairly dirty price tag.
Then there’s the issue of scale. While the technology works, scaling it up to meet national or international demand is no small feat. It takes time, planning, and a mountain of capital. And infrastructure? We’re basically starting from scratch.
But — and this is an important but — these challenges aren’t being ignored. As we’ll cover next, there is a lot being done to break down these challenges and turn green hydrogen into a long-term winner.
We know what needs to be done, and unlike some other alternatives being discussed, we’re not relying on the hope that currently non-existent technology will swoop in and make green hydrogen viable.
The technology is there, now we need the investment.
The Murchison Green Hydrogen Project
Government estimates state that the global green hydrogen market will be worth around 2.2 trillion AUD by 2050. So it should be no surprise that we want a piece of the action.
Enter the Murchison Green Hydrogen Project — the first project to receive backing from the federal government’s Hydrogen Headstart program, with up to $814 million in production support committed through ARENA.
The Murchison project is located north of Kalbarri in WA’s Mid West region. It plans to combine 1.2 GW of solar, 1.7 GW of wind, and 600 MW of battery storage to power 1.5 GW of electrolysis capacity — all entirely off-grid. The hydrogen produced on-site will be converted into ammonia for global export.
What makes this project so significant isn’t only its scale, it’s that it’s designed to prove green hydrogen’s commercial viability at a time when the world is watching. This is the kind of bold, investment-backed move that could kick-start Australia's hydrogen economy.
What This Means for Businesses Today
Projects like Murchison are a very strong start. And with a total of 2 billion AUD of investment in the pipeline, it’s only the beginning.
But the reality is that green hydrogen won’t be a part of your day-to-day energy mix anytime soon. That’s not a big red cross against the technology, it’s simply a fact of where it’s at right now.
But here’s the good news: the clean energy options available today are already proven, and you can start benefiting from them right now.
At Choice Energy, we help organisations reduce their energy costs and future-proof their operations using smart, scalable solutions like:
- Small business solar – generate your own power and lower daytime grid reliance.
- Solar battery systems – store excess energy and use it during peak demand or outages.
- Business energy procurement – secure better rates and contracts through expert negotiation.
While hydrogen continues to evolve, these technologies are ready now and already delivering results. If you’re looking for ways to cut energy costs, get started with a free energy assessment today.
