Policy Frameworks and Economic Incentives to Effectively Stimulate the Renewable Hydrogen Market in Australia*

This paper provides a comprehensive assessment of policies and economic incentives aimed at developing a renewable hydrogen industry in Australia. As global decarbonisation efforts intensify, renewable hydrogen is emerging as a potential substitute for fossil fuels. However, substantial technological and economic challenges must be overcome to achieve competitiveness and widespread adoption. This study examines both demand‐ and supply‐side policies, presenting a novel taxonomy to guide Australian policymakers in shaping effective strategies. A structured desktop assessment is then applied to key policy instruments and to Australia's current policy mix, identifying strengths in supply‐side support but weaker coverage of demand creation, price competitiveness and market formation. To complement this assessment, a stakeholder survey of government and industry participants is used to evaluate the importance and adequacy of current policy settings. The survey identifies the largest shortfalls in reliable demand creation, access to low‐cost renewable electricity, predictable pricing signals and long‐term policy certainty. It also shows that these gaps translate directly into commercial requirements, including long‐term offtake contracts, high certainty thresholds and a persistent risk premium for investment. The findings suggest that Australia's policy framework is too supply‐led, and that stronger demand‐side and market‐formation measures are required to support a scalable renewable hydrogen industry.