The Hydrogen Opportunity – Ecosystem Update 2023

The hydrogen ecosystem globally and in Aotearoa New Zealand continues to advance from early stages of development into the mainstream.

Authors: Collin Quarrie, Michelle Cook, John V. Kennedy


This is an GNS Science report published annually by the Aotearoa: Green Hydrogen Technology programme. 

The hydrogen ecosystem globally and in Aotearoa New Zealand continues to advance from early stages of development into the mainstream. Heavy transport and aviation, process heat, ammonia production and other heavy industries are the hard-to-abate sectors in decarbonising the economy. Distributed applications, commercialisation and technology; jobs and training, and collaborative endeavours through workshops and conferences are among the areas of focus across the value chain.

Globally, the size and number of projects continues to increase at an impressive pace with investment from private industry driving the long-term outlook for hydrogen. While the number of announced projects continues to grow, less than 10% of projects have reached Final Investment Decisions (FID) (Hydrogen Council, 2023). Science and innovation play a key role; the commercialisation of new technologies continues as researchers develop new materials, optimise electrolysers and fuel cells, and scale up to giga-scale factories.

Global hydrogen developments


Hydrogen demand reached 94 million tonnes (Mt) in 2021, recovering to above pre-pandemic levels (91 Mt in 2019), which is equivalent to approximately 2.5% of global downstream energy consumption. It is primarily used as a feedstock in refineries and chemicals industries, alongside various gases used in heat and power generation, and steel production (IRENA, n.d.). The majority of the increase came from traditional uses in refining and industry. Demand for new applications grew to about 40, 000 tonnes, which is a large percentage increase at 60% from 2020, but a small percentage relative to the total produced.

The total production of low-emission hydrogen was less than 1 Mt in 2021, the majority coming from plants using fossil fuels with carbon capture. However, the pipeline of projects to produce low-emission hydrogen is growing.


At the end of May 2022, industry announced 680 large-scale proposals which represent $240 Billion worth of investment. However, only approximately $22 Billion USD or 10% of projects are operational, under construction, or have reached a final investment decision (FID) (H2 Review, 2023). Among the key reasons are uncertainties about demand, lack of regulatory frameworks, and lack of available infrastructure to deliver hydrogen to end users (IEA, 2022).

Today, electrolyser manufacturing capacity sits at nearly 8 GW/yr and based on industry announcements it could exceed 60 GW/yr by 2030. Companies such as H-TEC in Germany (Matošec, 2023), and NEL, based in Norway (Collins, 2023), are among the manufacturers who have announced giga-scale electrolyser plants to meet anticipated future demand. Collectively, future production would be enough to meet current government targets for electrolysis deployment, however announced projects do not meet those targets. To meet commitments, more projects need to reach the FID stage and begin construction.

Transmission and Distribution

This area of the hydrogen value chain has the largest gap in investment to date. Approximately $24 Billion has been committed to infrastructure, which includes pipelines, terminals, ships, and refuelling stations (H2 ReView, 2023). As most existing pipelines are steel, they are susceptible to embrittlement, research is ongoing to retrofit and develop new materials to transport and store hydrogen (Smith et al., 2005).

In the world’s first shipment of liquefied hydrogen under and Australia and Japan collaboration, took place in February 2022 using a purpose-built ship (Australian Government, n.d.). Scale up and commercialisation of the technology for commercial-scale trials is underway. Most projects that have identified hydrogen as an energy carrier have chosen ammonia as the preferred option, due to the existing supply chain that exists today. The development of hydrogen or ammonia fuelled ships are currently under development (NEDO, n.d.). An estimated 12 Mt of hydrogen could be exported around the globe annually by 2030 (IEA, 2022).

Government Policy

Governments continue to consider hydrogen a pillar of their energy sector strategies towards reaching net zero emissions: nine new national strategies have been adopted since September 2021, bringing the total number to 26 (IEA, 2022). Some countries are moving to the next step by implementing policies, with a particular focus on supporting commercial scale projects (e.g. the US Inflation Reduction Act and the German H2Global Initiative) (H2 ReView, 2023). However, there is still not enough policy activity for creating hydrogen demand, which is critical to secure off-take agreements. A lack of demand creation can hinder final investment decisions, which is shown in the number of number of projects reaching FID as previously mentioned.


Aotearoa New Zealand

In the past year, progress has been made in areas ranging from policy, industries such as heavy transport, process heat, technology and startups, jobs and training, collaborative endeavours including workshops, and conferences. There is a growing recognition in Aotearoa New Zealand of the potential benefits of hydrogen as a low-carbon energy carrier, and a willingness among industry, government, and academia to invest in its development. However, many challenges remain, including the high cost of producing renewable hydrogen at scale, the need for infrastructure to support hydrogen use, policy development, and the limited domestic market for hydrogen-related products and services.

Government, regulatory progress, and the Science system

In September 2019, MBIE released the green paper "A vision for hydrogen in New Zealand" to seek feedback about the challenges and opportunities of building a hydrogen economy across the motu. Informing the national energy strategy, MBIE has committed to finalising the energy strategy before the end of 2024. It will incorporate various aspects of the energy industry, including hydrogen, that bring together social, environmental and economic wellbeing.

Ancillary to the Hydrogen workstreams, the government is also looking at developing regulatory settings for the Gas Transition Plan, and offshore renewable energy, focused in the Taranaki region which will most likely include Hydrogen produced from renewable energy should projects proceed in future.

In 2022, MBIE commissioned consultations and a report which reviewed the regulatory frameworks that would be required to support a hydrogen economy in Aotearoa New Zealand (PWC, 2022). The review covered market outlook, and regulatory approaches. It recommended the government set national priorities, remove regulatory friction, and continue to monitor and respond to changes in the macro environment, by continuing the working group that was established during the process.

Standards NZ is undergoing a review of hydrogen standards to enable the integration of hydrogen gas as an alternative to natural gas (Standards NZ, 2022). A technical advisory group consisting of energy sector experts reviewed standards outlined in the framework. Once completed, the framework will include three stages of use in stationary energy and storage, semi centralised distribution, and centralised distribution.

Crown Research Institutes (CRIs), universities, tertiary education, and independent research organisations have contributed to the development of hydrogen technology and the wider ecosystem. In 2022, MBIE released its White paper on Te Ara Paerangi – Future Pathways, which is a multi-year programme focused on re-orienting Aotearoa New Zealand’s Research, Science, and Innovation (RSI) system for better outcomes (MBIE, n.d.). Te Ara Paerangi will embed Te Tiriti by advancing Māori aspirations in the RSI system and developing and retaining talent, and empowering Pacific peoples. Moreover, the process will establish national research priorities, accelerate innovation, diversify and scale up impact, and grow the global connectivity of the system. As the programme develops and the system undergoes changes, this will no doubt impact of the various RSI actors and therefore the future of the hydrogen sector.

Industry pilots and economic development

There are many organisations both in the public and private sector in Aotearoa New Zealand that have begun to look more closely at hydrogen as a solution to decarbonisation. Below are some examples of recent highlights of pilot projects or other initiatives. This is not intended to be an exhaustive list but only to highlight some of the important work that is happening across the country.

Based in Christchurch, Fabrum recently raised $23 Million NZD from investors to supply small to medium scale liquefaction systems and composite cryogenic vessels. Their liquid hydrogen systems integrate membrane-free electrolyser technology and storage (Fabrum, n.d.). The most relevant applications for the technology are in aviation, marine, heavy transport, and heavy industry (Lewis, 2023).

Fabrum is also one of six international businesses that have created a consortium to help zero-carbon aviation move from a concept to reality alongside Christchurch Airport, Hiringa Energy, Fortescue Future Industries (FFI), Air New Zealand and Airbus (Christchurch Airport, n.d.). The consortium will investigate the requirements for an aviation hydrogen ecosystem.

The Southern Green Hydrogen project from Meridian, would be one of the first large scale production of ammonia derived from green hydrogen in the world. The project has gained the support of Ngāi Tahu and other stakeholders, and will produce 500, 000 tonnes of ammonia per year (Meridian, 2022). Woodside Energy was selected as the preferred partner in the project as it nears a Final Investment Decision. Other partners such as Mitsui of Japan continue to show interest in the project as Contact Energy announced they had opted out but may still supply energy (RNZ, 2022).

The HW Richardson Group, the largest privately owned transport company in New Zealand, announced it has invested in dual fuel diesel-hydrogen trucks (HWR, n.d.). The system injects a blend of both fuels into the engine, reducing carbon emissions by up to 40%. The company has plans to install its first hydrogen refuelling station later in 2023.

NZ Post has made a giant leap into the hydrogen ecosystem, announcing that it had added its first hydrogen truck to its fleet (NZ Post, 2022). The Hyundai XCIENT FCEV (Fuel Cell Electric Vehicle) was unveiled at its Auckland Operations Centre in July 2022. This is the first of five trucks brought into the country by Hyundai, and sets the company on the path to meeting its carbon neutral goal by 2030.

Halcyon, a producer of hydrogen using geothermal energy near Taupo, continues to supply hydrogen to pilots and engage in other initiatives. This has included a car sharing scheme which took shape in mid-2022. The Warehouse, Spark, Air New Zealand, and five other companies contributed its funding. A initial trial was conducted with two Toyota Mirai FCEV’s with the potential to add more if successful (Pointon, 2022).

Hiringa Energy has been at the forefront of the hydrogen industry in Aotearoa New Zealand over the past several years and continues to develop their mission of a building a nation-wide refuelling network for heavy transport. Their first four refuelling sites are scheduled to open in 2023 on key trade routes in the North Island.

Ballance Agri-Nutrients and Hiringa Energy are jointly developing the Kapuni Green Hydrogen and Ammonia project (Ballance, 2019). In November 2022, Ballance announced that the consent granted in 2021 and subsequently appealed by several local Hapū and Greenpeace, was held up in the high court. Pending the results of the appeal, construction for the project is set to begin at the end of the year (Groenestein, 2022). The project includes four wind turbines that will be used to produce hydrogen through electrolysis and converted to ammonia and urea and eliminate 12,500 tonnes of carbon annually, switching to hydrogen refuelling in the future.

Science, Commercialisation, and Technology

Globally, many enabling hydrogen technologies are not yet commercially or technically viable, including using direct reduced iron (DRI) for use in steel manufacturing, ammonia as a fuel source in shipping vessels and the use of synthetic fuels in aviation. However, there is an increasing number of demonstration projects which are showing promise in these areas for accelerated investment and development.

Naturally occurring hydrogen in the earth’s surface has gained some recent attention, with exploration occurring in areas such as Spain (Durham University, n.d.) and Australia (Gold Hydrogen, n.d.). While there are some locations in Aotearoa New Zealand that have this type of hydrogen (Lyon and Giggenbach, 1990), it is present in remote locations and likely not at the scale required to develop commercially.

Ara Ake has generated multiple reports on decarbonisation and other initiatives to commercialise energy solutions. The future energy centre has developed a vehicle total cost of ownership comparison tool. It allows for fleet operators to compare the capital and operating costs of different technologies (for example hydrogen versus hybrid or internal combustion vehicles.

Through its ongoing materials research in Green Hydrogen, GNS Science recently announced new commercialisation of its technology through bspkl (GNS, 2023). It is an exciting startup manufacturing company who will produce Catalyst Coated Membrane (CCM) for hydrogen electrolysers (bspkl, n.d.), helping to accelerate hydrogen’s widespread adoption globally as a clean energy source. Alongside lab developments, GNS socio- and techno-economic research continues. Our collaborators are modelling hydrogen fuel for heavy transport (Tan et al., 2022) and using the ‘energy cultures framework’, which visualizes external influences on cultural norms, material culture, and energy practices.

Collaborations and funding for ongoing research in institutions across Aotearoa New Zealand have continued. In the latest MBIE Endeavour funding round, $11.8M was awarded to University of Canterbury for the Research programme ‘Pūhiko Nukutū: a green hydrogen geostorage battery in Taranaki’, which will explore the challenge of how we can store large quantities of hydrogen underground, one of the keys to a successful energy transition.

International partnership is a key part of New Zealand’s ecosystem development. At the University of Otago, following funding from both New Zealand and German governments in 2021 (University of Otago, n.d.), the He Honoko Hauwai German-NZ Green Hydrogen Centre provides a mechanism for ongoing collaboration. Moreover, in August 2022, the first three German-NZ Green H2 research grants were awarded (University of Otago, n.d.).

Workshops and conferences

As the effects of the COVID-19 pandemic become a thing of the past, in person workshops and conferences have made a comeback. In May 2022, the New Zealand Hydrogen Council hosted the first H2 2 Zero Hydrogen Summit in Wellington’s Te Papa (Hydrogen Council, 2022). With an Industry-focus, it brought together speakers, influencers, and both industry and research leaders together to discuss various aspects of the ecosystem.

The inaugural New Zealand Hydrogen Symposium was also successfully held in early February 2023, hosted at the University of Otago, with a focus on research, commercialisation, and students by bringing together international expertise (University of Otago, 2023), was held parallel to the industry focused H2 2 Zero summit mentioned above.

Planning is well underway for the upcoming second editions of these events, with H2 2 Zero Summit confirmed for September 2023, and the second New Zealand Hydrogen Symposium to be hosted by GNS Science in January 31 to February 2, 2024 at Te Papa in Wellington.

Should we build a hydrogen economy?

Despite the progress in the Hydrogen and wider energy ecosystem change in the transition from fossil fuels, there remains large challenges across a broad range of topics that may inhibit meeting climate goals. According to Dempsey et al. (2022), a large overbuild of renewables would be required to produce Hydrogen at scale as well as use large quantities of water. More research on the effects of Hydrogen being released into the atmosphere is also required. Short-lived molecules such as hydrogen could provide a greater warming effect in the short to medium term (Ocko and Hamburg , 2022) and could cause a positive feedback loop with atmospheric methane (Bertagni et al., 2002).

In a letter to Hon Meghan Woods in 2022, Simon Upton highlighted that importance of getting the regulatory and strategy settings right while decarbonising our energy system. One of those is the risk of choosing a particular solution, such as green hydrogen, that may limit the adoption of other technologies to resolve issues such as dry-year risk. He argues that having a lack of understanding of the interactions between solutions such as Green Hydrogen and others such as Lake Onslow will cost the country more in the long term.

Despite the challenges of implementing hydrogen in New Zealand, many countries are pursuing a hydrogen economy. The International Energy Agency (IEA) released its annual review (2022) on global hydrogen development, and re-iterated how this coming decade needs to see large scale deployment of renewables and innovative hydrogen technologies to reach climate goals and ensure energy security. The recent extreme weather in the North Island in 2023 has highlighted that resilience to climate change and natural events needs to be present. One potential solutions are distributed energy systems, which are small-scale (approximately less than 1 Megawatt) that use renewable energy to generate hydrogen or ammonia, could provide greater resilience needed in our energy system.

The transition to Hydrogen will play a key role in transitioning hard-to-abate sectors for key New Zealand trading partners where other solutions are difficult to implement. Japan, which has signed a hydrogen agreement with New Zealand, can potentially utilize clean hydrogen to decarbonize its hard-to-abate sectors. It is investing $107 Billion USD over 15 years to increase Hydrogen supply (Reuters, 2023). There is potential to export green hydrogen produced in New Zealand to Japan, and bring long-term economic benefit to the country.

What’s next?

The energy transition, whichever form it takes, has its opportunities and challenges that will have a profound impact on the way we produce, store, and use energy. Many in the sector believe that hydrogen has its place alongside other technologies, but should not be seen as a silver bullet. Electrification, large scale energy storage, and energy efficiency should all be considered to keep the cost to a minimum and provide the most long-term benefit to all New Zealanders. Moreover, the RSI system should allow researchers, industry, and other stakeholders to work collaboratively on finding solutions to national and global issues.

Cook Michelle 4497

Michelle Cook Energy Materials Scientist

Michelle has been an Energy Materials Scientist at GNS Science since 2021. Michelle's expertise is in surface modification and characterisation, and her research interests are in low carbon energy applications. She holds a BSc, MSc, and PhD in Chemistry from Victoria University of Wellington. Michelle also completed a post-doctoral research fellowship at Victoria University of Wellington before joining GNS Science.

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The authors acknowledge funding from Ministry of Business Innovation and Employment, Aotearoa: Green Hydrogen Technology Platform (Strategic Science Investment Fund, Contract Number: C05X2007)

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