Developing hydrogen as a fuel source at scale is unlikely before the end of the decade, Ampol’s chief executive said, denting optimism about the zero-emissions fuel source.

Global interest in hydrogen has grown substantially as countries desperately seek alternatives to fossil fuels after pledging to reach net-zero emissions by 2050 or earlier.

Tempering expectations, however, Matthew Halliday, Ampol’s managing director and chief executive officer, said the technology is still at its nascent stage.

“If the technology continues to evolve, we are going to see hydrogen mature towards the end of the decade,” Mr Halliday told The Australian Financial Review.

“Later this decade we will get projects that can get to the scale that we need to reach our decarbonising goals,” he said on the sidelines of the Melbourne Energy Week conference.

Commercialisation of hydrogen is seen as possible once it can be produced for less than $2 a kilogram – H₂ under $2 – a milestone that global producers are many multiples away from.

The two largest components of producing hydrogen are electrolysers and the cost of energy, though a rapid increase in zero emission energy generation has significantly weighed on wholesale electricity prices.

Despite the timetable, many companies are moving aggressively to position for the expected rise of the fuel source.

Ampol last year unveiled a strategy to eventually shift from a traditional petrol and diesel retailer to a low-carbon provider of power for electric vehicles and hydrogen, utilising its refining sites and nationwide distribution network.

It is also planning a green hydrogen plant next to its Brisbane oil refinery, partnering with a start-up in hydrogen-based micro-generation and storage, and envisaging a longer-term national rollout of an electric vehicle charging network.

The former Caltex Australia is making a major move into electricity as part of its strategy to reach net-zero emissions by 2040 and tap into new low-carbon sectors such as hydrogen and batteries.

Mr Halliday said he expects hydrogen will be widely used a fuel source for energy generation and within transport.

Hydrogen typically better suits the heavier end of the transportation sector, while electric battery vehicles are widely expected to dominate among passenger cars. Hydrogen fuel cells have about 100 kilometres extra driving range compared to the typical electric vehicle,

Global companies have in recent months moved aggressively to explore zero emission trucks and buses, and Hyzon Motors – a Nasdaq-listed producer of hydrogen-powered commercial vehicles – said earlier this year it will spend more than $50 million to expand production in Australia as it seeks to capitalise on corporate demand to reduce emissions from fleet vehicles.

Mr Halliday said developing hydrogen will also aid Australia’s energy transition.

The transition from coal – the traditional source of its electricity generation – to renewables is under the microscope amid an energy crunch that threatens to shutter businesses and heighten concerns about the costs of living on households already struggling with soaring inflation and stagnant wage growth.

Still, Mr Halliday said hydrogen as a fuel source to aid the transition away from coal and other fossil fuels is at least 15 years away.

Mr Halliday said there are significant issues around transporting hydrogen, which would limit the development of the zero emission fuel source in Australia.

Transporting hydrogen would require custom-made pipelines should it shipped in liquid form, but if shipped at higher concentrations it can damage steel pipelines, a process known as embrittlement.

Hydrogen embrittlement occurs when metals become brittle after the introduction and diffusion of hydrogen into the material.

Extracted in full from: Hydrogen as a fuel source unlikely before 2030: Ampol (