An investment in hydrogen hubs unveiled by Scott Morrison on Tuesday could open the door to Australia producing green steel and other critical metals for export, a national energy expert says.

Mr Morrison was campaigning in Perth on Tuesday, announcing a $140 million injection for two hydrogen hubs in Western Australia, which he says will create 3,600 new jobs in the state.

The money will go towards BP Australia’s H2Kwinana clean energy hub south of Perth and the WA government’s Pilbara Hydrogen Hub in the state’s north.

Both major parties made energy-related announcements in the mining state on Tuesday, with Labor pledging $3.2 million to install a wind turbine training facility in a TAFE in Perth’s east.

Deputy Labor leader Richard Marles said the commitment would establish the Midland campus as a leader in training for high-tech renewable energy jobs.

Deputy Labor leader Richard Marles said a skilled workforce to install, maintain and repair wind turbines is critical to WA’s future. (ABC News: Keane Bourke)

“It’s very simple and relatively low cost to take coal out of the ground, put it on a ship and send it to Korea or Japan or China, it’s much harder to do the same thing with hydrogen,” he said.

“So using the hydrogen here, to react with the iron ore to make iron and steel may very well be the cost effective thing to do, and there are companies in Australia who are very keen to do that.”

Hydrogen can be used as a clean fuel in the production of iron ore.(ABC News: Rachel Pupazzoni)

But Mr Wood said the market demand for the “green version” of iron or other critical mineral products like aluminium and lithium was currently modest.

“Getting too far ahead of the investment curve would be a dangerous place to be,” Mr Wood said.

“Governments working with companies to take a very hard-headed assessment of the risk and the opportunity is probably a sensible way forward.”

Hydrogen may give Australia future fuel security

Mr Wood said Australia’s fuel security vulnerability was centred on transport as we had more than enough resources to produce electricity for domestic consumption.

Tony Wood says hydrogen may provide a better way of powering heavy transport.(Supplied: Grattan Institute)

However, hydrogen could be a future resource to bolster the nation’s fuel security for transport, as Australia moved towards electrification to replace petrol and diesel.

Mr Wood said while Australian renewables could be used to power personal vehicles and small commercial vehicles, hydrogen may be a more efficient way to power long distance heavy transport.

Greens leader Adam Bandt, who was also in WA on Tuesday, said while hydrogen was the “fuel of the future”, it had to be green.

Adam Bandt says hydrogen must be produced using renewable energy. (Ian Cutmore (ABC News))

Hydrogen can be extracted from water using heat and chemical reactions but the process is highly polluting.

However, if electricity produced by renewable energy is used to split the hydrogen from the water, it can be considered “green”.

“No one around the world is going to want to buy it if it’s made from coal and gas,” he said.

Western Australian mining magnate Andrew Forrest recently turned the sod on a hydrogen project in Queensland, saying he wanted to build in his home state but “land tenure” issues prevented this.

Grattan Institute program director for energy and climate change Tony Wood said currently Australian companies are exporting iron ore and metallurgical coal to Asia to make steel and iron.

But with the advent of clean hydrogen production in WA, iron ore companies could use renewable hydrogen to make iron domestically for export.

Extracted in full from: Federal Election 2022: Scott Morrison pledges $140m for hydrogen hubs in WA – ABC News