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Germany and the US showcase new electrolyser pilot plants, but Australia’s hydrogen sector is faltering, according to report
11/6/2025
News
The opening of Thyssenkrupp Nucera’s SOEC and OCOchem’s CO2 electrolysis pilot plants on one hand, and Wood Mackenzie’s analysis of Australia’s lagging hydrogen sector on the other, reveal the diverging trajectories of global players in the hydrogen economy. While Germany and the US push forward with electrolyser deployments, Australia risks losing its early-mover advantage without stronger policy intervention.
Pilot solid-oxide electrolyser production plant opens in Germany
Thyssenkrupp Nucera and the Fraunhofer IKTS research institute have inaugurated a solid-oxide electrolysis cell (SOEC) pilot production facility in Arnstadt, Germany.
The pilot plant is designed to develop and manufacture SOEC stacks for industrial-scale hydrogen production. It has an initial capacity of 8 MW/y, with the potential for further scale-up.
The SOEC stack technology is based on an oxygen-conducting ceramic electrolyte substrate with two electrodes. They are assembled together with coupling elements, the chromium-iron (CF) interconnectors, on several layers to form the stack. CF-based SOEC technology guarantees high corrosion resistance, optimised thermal cycle performance and high long-term stability with regard to temperature cycling, according to Thyssenkrupp Nucera. It also says the streamlined component design is optimised for highly automated mass production, a critical factor for cost reduction and scalability.
SOEC electrolysis ensures high efficiency because less electrical energy is required to split water vapour into hydrogen and oxygen at high temperatures, adds Thyssenkrupp Nucera. It claims that when this technology is used in commercial high-temperature electrolysis within processes that generate large amounts of waste heat, such as in the steel industry, electricity consumption could be reduced by 20% to 30% compared to other technologies.
‘We are convinced of the advantages of this electrolysis technology for the production of green hydrogen. It will play a central role in a new, climate-friendly energy mix,’ comments Dr Werner Ponikwar, CEO of Thyssenkrupp Nucera.
‘By integrating SOEC technology into industrial waste heat sources or directly generating synthesis gas from water and CO2, companies can maximise the efficiency of green hydrogen production and effectively implement their decarbonisation strategy. These advantages make SOEC technology a real game changer,’ adds Professor Alexander Michaelis, Director of Fraunhofer IKTS.
US debuts world-first pilot plant to produce formate at industrial scale
Across the Atlantic, US clean tech start-up OCOchem has commissioned what it calls the world’s first pilot plant to produce hydrogen formate and potassium formate at industrial scale using only CO2 and water as feedstocks.
The facility operates at ambient conditions using a four-cell stack of the world’s largest gas-diffusion CO2 electrolyser cells, each boasting a 1.5 m² electrode surface area, explains OCOchem. With these, the plant is capable of producing up to 60 t/y of formate. That liquid organic molecule is a versatile chemical used in agriculture, manufacturing, pharmaceuticals, cleaning products, metal processing and increasingly as a liquid carrier for hydrogen and carbon monoxide (syngas).
Each tonne of formate produced by OCOchem’s system removes and avoids some 7.2 tonnes of CO2 emissions, according independent analyst firm EcoEngineers. OCOchem says that factory commissioning is accelerated by being fabricated offsite. The pilot plant was built off-site, delivered, rolled into place and commissioned in six weeks.
The facility incorporates several proprietary technologies, including CO2 gas diffusion electrodes with one hundred times higher conversion rates than traditional aqueous systems or solubility-limited systems, and electrolyser cells that are 20 times larger than those used in typical fuel cell and hydrogen electrolyser technologies. The system is scalable by adding modules. OCOchem envisions a distributed production model, where mass-produced modular units can be rapidly deployed anywhere CO2 is available.
OCOchem’s electrolyser pilot plant for formate production
Photo: OCOchem
Australia risks losing edge in global hydrogen race as projects stall, warns Wood Mackenzie
Meanwhile, new analysis from Wood Mackenzie suggests that despite its early ambitions, Australia is falling behind in the global hydrogen economy, with 80% of its low-carbon hydrogen projects still in early development. Other high-profile projects, such as Grange Resource Renewable Hydrogen Study and Nyrstar Port Pyrie, have been cancelled
‘Australia’s strategic proximity to Asian demand centres is a clear advantage,’ comments Joshua Ngu, Vice Chairman for Asia-Pacific at Wood Mackenzie. ‘But this is offset by a significantly higher levelised cost of hydrogen (LCOH), driven by elevated engineering, procurement and construction (EPC) and power costs. This leaves Australia trailing behind global hydrogen front-runners such as the Europe and the Middle East.’
Globally, just 6mn t/y of low-carbon hydrogen capacity is either operational or under construction. Of that, Australia contributes less than 5%. Even high-profile domestic projects such as Fortescue’s PEM50 and the Yuri green ammonia project have capacities of under 10,000 t/y, notes Wood Mackenzie.
It outlines five key areas where policy and market interventions could help reposition Australia as a hydrogen leader in a global stage:
- Stimulating domestic demand through policy support instruments like Contracts for Difference, which have already been adopted in Germany, Japan and South Korea.
- Increasing production incentives, noting that Australia’s current support of ~$1.30/kg lags behind the $3/kg Hydrogen Production Tax Credit available in the US.
- Supporting blue hydrogen as a transitional technology using natural gas with carbon capture and storage (CCS) to bridge the cost gap.
- Aligning standards with global certification schemes, such as Japan’s Green Hydrogen Certification, to unlock export potential.
- Strengthening international collaboration to secure off-take agreements and attract investment.
Australia’s stringent carbon intensity threshold of 0.6 kg CO2e/kg of hydrogen – compared to 3.4 in Japan and 3.38 in the EU – also presents a barrier for projects seeking subsidy qualification or international recognition, suggests the report.
In summary, Ngu states: ‘Unless Australia ramps up policy support and market development now, it may find itself locked out of the next wave of industrial transformation.’