Joyce slaps down Canavan over demand to ditch hydrogen hubs

“Hydrogen hubs are not going to defend us against military bases in the Solomon Islands. We need reliable power now, which is why we should be building coal-fired power stations now.”

Later in the day, Senator Canavan doubled-down. He told ABC television that the “net zero thing is all sort of dead anyway”.

“Germany is building coal and gas infrastructure, Italy’s reopening coal-fired power plants. It’s all over. It’s all over bar the shouting here.”

The comments came as the government seeks to escalate uncertainty over Labor’s net zero plans for coal companies in the Hunter region of NSW, and are understood to have infuriated Coalition strategists and senior government figures.

Senator Canavan’s attacks on the government’s net zero strategy and cornerstone hydrogen hub investments – which have totalled more than $1 billion – are particularly galling for Mr Morrison and big-city Liberal MPs, including Treasurer Josh Frydenberg.

As the Financial Review reported last month, the bill for winning over the National Party’s support for the government’s climate policies – in the form of concessions and funds for Mr Joyce’s priorities – has grown to anywhere between $17 billion and $34 billion, according to the budget documents.

Senator Canavan’s remarks coincided with a visit by Mr Morrison to North Queensland on Tuesday where he pledged two new hydrogen hubs in Townsville and Gladstone. Some of the federal government’s funding will flow to Andrew Forrest’s Fortescue Future Industry’s green hydrogen gigafactory, another bugbear for Senator Canavan.

Low Emissions Technology Australia, an industry group formerly called COAL21, said the government’s hydrogen funding would have a significant impact on cutting carbon emissions from heavy industry.

“This funding is a welcome contribution that will help lay the foundation for a Queensland carbon hub and establish clean industries of the future,” said LETA chief executive Mark McCallum.

Glencore, which won up to $35 million in federal funding for its carbon capture and storage project at the Millmerran Power Station in Queensland, said the government’s support was “positive and pragmatic”.

“It balances investment in energy systems of the future and a pathway for materially reducing emissions from fossil fuels, while recognising the important contribution these industries make to jobs and the national economy,” said Darren Greer, general manager of the Glencore CTSCo Project.

Hydrogen hubs are one of the key technological drivers identified as critical by the government for its promise to put Australia on track to reach net zero emissions by 2050 – a pledge Mr Morrison took to the world at last year’s UN climate summit in Glasgow after months of protracted negotiations with Mr Joyce.

Mr Joyce said he understood Senator Canavan’s view that Australia’s energy policy ensures the country becomes as “strong as possible as quickly as possible”.

But he also made it clear he did not support Senator Canavan’s views, insisting that hydrogen technology will pay a critical role in shifting the nation’s reliance off exports of natural gas.

He also contrasted the Coalition’s approach to that of Labor, which he claimed was about “just kicking people out of industries”.

“We’re saying, ‘no, we’re going to allow you a choice, so we’re going to build up another industry and allow you to choose between the two’.

“Then, when people dive into the details and combinations of permutations that surround the manufacturing of hydrogen, then people can have different opinions.”

Mr Joyce said there was already “a lot of money” in the sector and Australia had already started producing hydrogen.

“We’re developing an alternative [to coal] … so that people in the future in areas such as Gladstone can have a choice.

“But in the meantime, their job is safe, and that is the difference between us and the Labor Party.”