Hydrogen in New Zealand

New Zealand has considerable renewable energy resources that could be used to produce green hydrogen as a next generation, low-emissions fuel. Green hydrogen has the potential to help reduce our emissions by replacing fossil fuels in some harder to decarbonise sectors, such as long-distance and heavy transport; iron, steel and chemicals production; and marine and aviation sectors.

Growing New Zealand’s hydrogen industry can help New Zealand achieve its commitments to reduce net emissions of all greenhouse gases (except biogenic methane) to zero by 2050 and has the potential to support the Government’s goal of reaching 100 per cent renewable electricity by 2030.

Hydrogen in New Zealand has potential to support decarbonisation efforts overseas through export trade.  Current global demand for hydrogen is around 90 million tonnes and the International Energy Agency predicts this could increase sixfold by 2050. New Zealand may be able to capitalise on this demand, particularly focusing on supplying hydrogen to Asia, due to high demand requirements and our proximity. Although demand for exported New Zealand hydrogen will be dependent on long-term supply arrangements and competitiveness of New Zealand hydrogen production costs compared to other countries.

Hydrogen projects in Aotearoa New Zealand

This map shows key hydrogen projects, research and agreements around the country as at April 2022.

Developing a hydrogen strategy

New Zealand’s hydrogen strategy consists of 2 parts:  

A vision for hydrogen in New Zealand – a green paper published in 2019 that looks at the scope of New Zealand’s hydrogen potential to frame discussions for a national strategy.

A vision for hydrogen in New Zealand

A hydrogen roadmap – currently being developed to provide a blueprint for the development of a hydrogen industry in New Zealand and help inform foreign and domestic investment in New Zealand.

A hydrogen roadmap for New Zealand

Reviewing hydrogen regulatory settings

Although hydrogen is already well regulated for its traditional uses, the existing regulatory systems are not well set up to support new hydrogen technologies and applications. It is important to evaluate how fit-for-purpose the current regulatory settings are for new hydrogen technologies and novel applications of hydrogen, such as a low-emissions fuel, and ensure they are consistent with international best practice standards.

Ensuring the current regulatory settings are fit-for-purpose is critical for facilitating the safe introduction of new hydrogen technologies and applications, and in promoting domestic and international investment in hydrogen in New Zealand.

As part of this work:

• MBIE is assessing whether New Zealand’s regulatory settings for hydrogen are fit-for-purpose. This work involves a working group of key regulatory agencies and will result in a report outlining the steps needed to ensure New Zealand’s hydrogen regulatory settings support wider uses of hydrogen in the economy.
• Standards New Zealand has completed a scoping study outlining a suite of standards adoption recommendations to enable the use of hydrogen across New Zealand’s energy landscape. An implementation strategy is currently in development.
• WorkSafe has established a working group to ensure the risks to health and safety in adopting new hydrogen technologies are adequately managed, identify regulatory gaps, and establish whether there are regulatory barriers to industry adopting new hydrogen technologies.

Report Published: New Zealand’s Hydrogen Regulatory Pathway

As part of the hydrogen regulatory settings project, MBIE engaged PwC to review whether existing regulatory frameworks are fit for purpose to support a future New Zealand hydrogen economy, and to advise on regulatory reform pathways to support the hydrogen roadmap.

PwC’s independent review made broad findings that will help to inform the direction of any ongoing regulatory work. Some of these were that:

• the Government should develop a clear national policy strategy for how New Zealand will navigate the hydrogen opportunity. Aligning incentives and policy support for hydrogen with other decarbonising options would help to level the playing field for renewable solutions and provide confidence to investors and underpin future regulatory reforms.
• the final form of the hydrogen landscape and how it integrates within New Zealand’s legislative framework is not yet known. This will become clearer as technology and applications evolve and this will help inform requirements for legislative and regulatory change. Agencies will need resource and flexibility to amend regulation to provide clarity and certainty for hydrogen.
• the prescriptive nature of some of New Zealand’s safety regulations is creating a lack of flexibility for new uses of hydrogen. While there is some urgency in progressing some areas of reform, there is time to monitor and consider other changes in response to market developments. Collaboration between the Government, regulators, business, and iwi will be important going forward to ensure robust regulatory regimes ensure safety while enabling uptake.
• there is a need for ongoing monitoring of regulatory issues across the future hydrogen value chain. PwC considered that the Working Group is a useful forum to co-ordinate this activity and should continue to operate.

Next steps

The report forms a foundation for where regulators across the multiple regimes likely to be impacted by new uses of hydrogen may need to focus in order to enable hydrogen as part of our energy transition. It will inform the ongoing work to review New Zealand’s regulatory settings for the use of hydrogen, along with related projects such as the StandardsNZ project to integrate hydrogen into New Zealand’s energy landscape.

International collaboration

The Government is collaborating internationally to support research and development of hydrogen technology as we move towards a low-carbon economy. This includes:

• signing a Memorandum of Cooperation on hydrogen with Japan
  Memorandum of Cooperation on hydrogen with Japan(external link) — beehive.govt.nz

• signing an Arrangement of Cooperation with Singapore
  Arrangement of Cooperation with Singapore(external link) — Ministry of Foreign Affairs and Trade

• supporting joint research projects with Germany under the New Zealand – Germany Green Hydrogen Research programme
  New Zealand – Germany Green Hydrogen Research programme

• representing New Zealand at the Japan Hydrogen Ministerial since 2018
  Memorandum of Cooperation on hydrogen with Japan(external link) — beehive.govt.nz

• joining the new hydrogen initiative under the Clean Energy Ministerial
  The Hydrogen Initiative(external link) — the Clean Energy Ministerial

• leading work within the Asia-Pacific Economic Cooperation (APEC) to initiate discussion on the development and implementation of an international standard for low-carbon hydrogen.
  Low-Carbon Hydrogen International Standard(external link) — APEC Project Database

• representing New Zealand in the Association of Southeast Asian Nations (ASEAN) Working Group on Demand and Supply
  Demand and Supply Potential of Hydrogen Energy in East Asia(external link) — ASEAN Potential of Hydrogen Energy in East Asia 

Support for hydrogen in the regions

Hydrogen infrastructure built using existing energy sector skills and supply chains could help regions such as Taranaki, Northland and Southland grow new business opportunities based on green hydrogen and create new jobs. 

The government has:

• Invested $19.9 million through the Provincial Growth Fund, in the joint venture between Ballance Agri-Nutrients and Hiringa Energy to produce green hydrogen from renewable energy and water in Kapuni, south Taranaki.
  PGF investment in green hydrogen(external link) — beehive.govt.nz

• Co-funded the H2 Taranaki feasibility study and roadmap development, to advance uptake of hydrogen technologies in Taranaki.
  H2 Taranaki feasibility study(external link) — H2 Taranaki

• Funded First Gas $260,000, through the Provincial Development Unit, to undertake its Hydrogen Feasibility Study, which investigated how existing gas infrastructure could adapt to transporting hydrogen. 
  Hydrogen Feasibility Study(external link) — First Gas

Government investment in hydrogen research, science and innovation

The government is investing in hydrogen-related research through its research, science and innovation system. For example:

• $8.5 million from MBIE’s Endeavour Fund in 2020 for GNS Science’s project ‘Powering NZ’s green-hydrogen economy: Next-generation electrocatalytic systems for energy production and storage’
• $1 million from MBIE’s Endeavour Fund in 2019 for GNS Science research on ‘Nano-catalytic surfaces for efficient, stable fuel cells and eco-friendly hydrogen production’.
• $9 million from the Government’s Advanced Energy Technology Platform invested in GNS Science’s programme ‘Aotearoa: Green Hydrogen Technology’ in 2020.
• $6.5 million from MBIE’s Endeavour Fund in 2019 invested in the Robinson Research Institute (Victoria University of Wellington)’s Zero-CO2 production of essential technological metals, which is researching the use of hydrogen in steel-making

Government investment in transitioning to hydrogen technologies

The New Zealand Hydrogen Council was formed in September 2018 by private and public sector organisations along with seed funding from MBIE to support the progression and uptake of low-emission hydrogen in New Zealand.

New Zealand Hydrogen Council(external link)

Supporting hydrogen vehicles uptake

Converting heavy transport away from fossil fuels is a key step in reducing emissions. To support the uptake of hydrogen vehicles, the Energy Efficiency and Conservation Authority (EECA) has been working with several New Zealand firms on hydrogen demonstration projects through the Low Emission Vehicles Contestable Fund (LEVCF), its successor the Low Emission Transport Fund (LETF), and the government’s $3 billion ‘shovel-ready’ infrastructure programme.

The Government has:

• Funded Ports of Auckland $160,000 as part of round 5 of the LEVCF to purchase and trial a hydrogen fuel-cell bus as part of the wider hydrogen demonstration project in Auckland.
• Funded Hyundai Motors New Zealand $500,000, as part of round 9 of the LEVCF, to purchase and deploy a fleet of 5 medium duty hydrogen trucks.
• Loaned Hiringa Refuelling New Zealand $16 million to establish a hydrogen refuelling network, as part of the $3 billion ‘shovel ready’ infrastructure programme.
• Funded TR Group $4 million in co-funding from the COVID-19 Response and Recovery Fund along with an additional $2 million in co-funding from EECA to purchase up to 20 heavy freight hydrogen trucks. TR Group will lease the trucks to its customers and use Hiringa’s hydrogen refuelling network.
• Funded Kiwi H2 Ltd, as part of Round 1 of the LETF to convert two diesel trucks to run on 40% hydrogen, using an exclusively licensed dual fuel product from the United Kingdom. This will help fleets decarbonise until commercially available and viable 100% zero-emission options are available in New Zealand.

Through the Low Emissions Transport Fund, up to $25 million a year of funding is available to support the development of low emissions technology, innovation and infrastructure. This fund builds on the now complete Low Emissions Vehicles Contestable Fund.

Low Emissions Transport Fund(external link)  — Te Tari Tiaki Pūngao Energy Efficiency and Conservation Authority

In 2019, the Ministry of Transport initiated the Green freight project, which looks specifically at the role alternative green fuels—electricity, green hydrogen and biofuels—could play in reducing emissions from heavy vehicles carrying freight on New Zealand’s roads. 

‘Green Freight: 2020’, a strategic working paper which incorporated stakeholder feedback from the ‘Green Freight Background Paper’ was released in May 2020. The working paper outlines options the Government could implement over the next 15 years.

Green Freight project(external link)  — Te Manatū Waka Ministry of Transport

MBIE research

MBIE’s Innovative Partnerships team has been exploring hydrogen for advanced aviation under its Clean Technology Portfolio. This has been in consultation with a number of other groups exploring hydrogen in general both inside government and in the private sector. In March 2022, we commissioned Arup to write a report to help identify a suitable airport or airports for trialling hydrogen for aviation in New Zealand and to understand the infrastructure requirements for setting up a hydrogen hub as a first step towards research and development of hydrogen as a low carbon fuel for advanced aviation.

The first part of the report – Trialling Green Hydrogen for Aviation at Airports in New Zealand. The next part will focus on infrastructure requirements at a specific location.

Trialling hydrogen for aviation would contribute to building an advanced aviation ecosystem in New Zealand and attract international research and development investment. It would also accelerate commercial uptake of new technology in New Zealand and overseas, and contribute to the decarbonisation of aviation.

MBIE Innovative Partnerships(external link)