The Federal Government has created a $300 million fund to help finance hydrogen projects.

The Advancing Hydrogen Fund will focus on growing a clean, innovative and competitive hydrogen industry in Australia, according to a joint statement from Finance Minister Mathias Cormann and Energy Minister Angus Taylor.

Senator Cormann said the government is drawing on the energy and financial markets expertise of the Clean Energy Finance Corporation to push more investment in hydrogen.

“This new fund will be a catalyst for the future growth of Australia's hydrogen industry, which has the potential to boost Australia's energy security, while creating more new jobs across the country and becoming a major new export industry,” Senator Cormann said.

“There are many innovative Australian organisations working to advance the hydrogen industry and this fund will support that work. Our government is very committed to backing technological advances in the hydrogen industry.”

A total of $370 million will be reserved from existing Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA) funding to back new hydrogen projects. These funds will come from within the existing allocations to the CEFC and to ARENA.

The CEFC will commit $300 million of concessional finance through a new Advancing Hydrogen Fund and ARENA will provide $70 million to kick-start electrolyser projects.

Mr Taylor said the government believes a local hydrogen industry will create jobs in regional areas, and billions of dollars in economic growth in coming decades.

“Importantly, if we can get hydrogen produced at under $2 a kilogram, it will be able to play a role in our domestic energy mix to bring down energy prices and keep the lights on,” he said.

“Our hydrogen industry has the ability to make a tremendous positive impact both at home and overseas. From cheaper energy bills and job creation in regional Australia, to playing a role in reducing global emissions both at home and in countries that buy Australian produced hydrogen, the industry's potential cannot be ignored.”

The Fund will support projects that match the terms of the National Hydrogen Strategy – including those that advance hydrogen production, develop export and domestic supply chains, establish hydrogen hubs or build domestic demand for hydrogen.