Federal government warned coal-producing communities need more than just hydrogen to adapt to clean future
The federal government is being warned green hydrogen cannot be a catch-all solution for regions most exposed to a phase-out of coal and gas in the decades ahead.
And it is being urged to work with local communities to build diverse new economies, capitalising on existing skilled labour working in the coal and gas sectors.
A new report from the Centre for Policy Development looks at the unique challenges facing a range of Australia's most coal and gas-exposed communities, including the Hunter, Pilbara, Latrobe and Gladstone regions.
It considers a range of factors that might help or hinder communities as demand for coal and gas dwindles.
That includes measuring how many people in the region are employed in coal or gas, education levels across the workforce, the presence of other industries like agriculture and tourism, and the 'social fabric' of the community.
The report warns that much of the current focus from governments has been on replacing coal and gas production with newer industries like green hydrogen, including setting up 'hydrogen hubs'.
Report author Mara Hammerle says while the industry could be enormously beneficial in many regions, seeking to replace coal and gas with a new "anchor industry" in those communities could be a trap.
"Hydrogen can't be the answer to all of the problems," she said.
"I think what needs to happen is that the communities are the ones that really come up with their own ideas for their futures, rather than a very top-down approach."
Ms Hammerle said governments need to tailor their approach for specific regions.
"There will definitely be different kind of potentials and different futures for different regions," she said.
"And it's not just a matter of putting a hydrogen hub, or investing in in critical minerals, in all of these areas."
One advantage many coal-and-gas producing communities have is a highly-qualified workforce, with skills that can be adapted into different industries.
While only 13 per cent of people in regional areas broadly work in STEM (science, technology, engineering and math) occupations, that figure climbs as high as 25 per cent in some coal-and-gas producing areas.
Some businesses are already looking to capitalise on the skill sets of workers leaving coal-producing jobs.
Earthworker Cooperative, a manufacturing business in Morwell in Victoria's Latrobe Valley, has been hiring workers with prior careers in the region's energy sector.
The business manufactures solar hot water systems and battery components.
Co-op Secretary, Dan Musil, said there are plenty of workers in the region with skills that transfer smoothly into manufacturing — presenting a clear opportunity for the region.
"In manufacturing products like ours, we can draw on lots of the skills that the power industry has built up over generations — things like boilermaking, welding and metal fabrication," he said.
"So we've had people in through our factory who have spent decades in power stations."
The Latrobe Valley has spent years adjusting to the closure of the coal-fired Hazelwood Power Station in 2017, and is preparing for future closures of the Loy Yang A, Loy Yang B and Yallourn Power Stations.
Yallourn is due to close in 2028, and Loy Yang A in 2035.
Most coal-and-gas producing regions are wealthier than other parts of regional Australia, but the exception in the areas looked at by the Centre for Policy Development is Latrobe.
Dan Musil said the area needs to start diversifying its industries now, to prepare for the economic blow of those future coal closures.
And he is confident manufacturing can be a part of that solution.
"I think the trap that people often fall into when thinking about transition is looking for a kind of one-to-one industry or one-to-one job swap," he said.
"The reality is any transition, and particularly the one facing us in coal industries like Latrobe Valley, is going to require a lot of diversification.
"And it's going to require a whole bunch of different solutions, not any single solution."
The federal government has set up a number of 'hydrogen hubs' around the country in places like Gladstone, the Hunter and the Pilbara, hoping to accelerate the development of green hydrogen.
Green hydrogen (or clean hydrogen) is hydrogen made using renewable energy, and can be used for a range of industrial purposes.
There is substantial government money behind the industry too, with $2 billion committed in the most recent federal budget for the "Hydrogen Headstart" program.
Amanda Cahill from not-for-profit group The Next Economy argues there are clear opportunities in places like Gladstone for workers to move fairly smoothly from the gas industry into hydrogen.
But she cautions against viewing the emerging sector, or any other one sector, as the solutions to looming challenges faces in places like central Queensland.
"I think that silver bullet idea, that we can just replace one industry with the next biggest thing, doesn't work very well," she said.
"For a start, when we do that we see big boom and bust cycles. But it also creates a lot of vulnerability for that region."
Ms Cahill points to the booming demand for jobs in construction of new renewable energy projects as an enormous positive for regions looking ahead to a future with much less demand for coal.
And she says that ongoing demand from renewables can help further develop Australian manufacturing too.
"If you look at what we need to do with the renewable energy build-out, the amount of components and equipment that we're going to need, just the Australian demand alone could fuel that industry," she said.
"If we look at it, we've got all the raw materials, we've got the know-how it's just whether or not the investment is going to flow to supporting the whole supply chain to get up and running."
The federal government's new Net Zero Authority, which is tasked with steering coal-and-gas producing communities through the energy transition, will be established on July 1.
Amanda Cahill is urging the new authority to take a 'holistic' approach to supporting the regions it is looking at.
"We need to support places to come up with their own five-year economic strategies that build on the strengths in that place," she said.
"And look at all the broader issues like what are the services that are needed? What are the housing issues? What's the infrastructure upgrades that are needed? How is the community going to benefit from this?"
We acknowledge Aboriginal and Torres Strait Islander peoples as the First Australians and Traditional Custodians of the lands where we live, learn, and work.
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