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Submission

AHC FED Strategic examination of Australia’s R&D system

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11th April 2025

Strategic Engagement of Research and Development Secretariat
Department of Industry, Science and Resources
Australian Government
GPO Box 2013, Canberra ACT 2601, Australia

To the Strategic Engagement of Research and Development Secretariat,

Re: Strategic examination of Australia’s R&D system

The Australian Hydrogen Council (AHC) welcomes the opportunity to provide insights to the consultation process of strategically examining Australia’s R&D ecosystem.

The AHC is the peak body for the hydrogen industry and our membership includes companies from across the hydrogen value chain. Our members are at the forefront of Australia’s hydrogen industry, developing the technology, skills and partnerships necessary to ensure that hydrogen and its derivatives such as ammonia and methanol play a meaningful role in decarbonising Australian industry.

The AHC understands the critical nature of Australia harnessing a vibrant R&D ecosystem that leverages the people, infrastructure and capital across industry (large and SMEs), universities and other R&D institutions. We have advocated for specific R&D priorities and themes in previous Australian Government policy consultations (e.g. the refresh of Australia’s National Hydrogen Strategy)[1] and will continue to do so. We must celebrate Australia’s previous commercialisation success and more importantly learn from where Australia didn’t maximise our nation building opportunity. Prime Minister Albanese recently highlighted the lost opportunity from the PERC solar cell.[2] It was first invented at UNSW in 1983 and today powers more than 85% of all new solar panel modules all over the world. Yet there is negligible solar cell manufacturing in Australia.

Australia must harness R&D and industry solutions through our SMEs and start up community. Over the past decade, this community has been growing its capability from working with mining, renewables, oil and gas, Industry 4.0 and on other climate tech related challenges. We have been tracking over 60 Australian hydrogen startups and have now created a membership tier that is geared to provide value for startups. This enables them to contribute to the wider Australian hydrogen ecosystem, gain insights quicker and develop the connections and relationships required to progress the technology commercialisation journey.

Enhance and support existing government programs

Australia’s hydrogen industry is well supported through the various Australian Government funded grants, tax concessions, bilateral agreements and R&D infrastructure that keeps Australia in the global race. The policy rationale and intentions are sound, but we seek to refresh many of the guidelines that create bottlenecks for Australian SMEs to take full advantage of programs. This includes (but limited to):

  • Simplify application processes – Many of the funding rounds (e.g. ARENA’s Advancing Renewables Program) are open to businesses of all sizes from Australian startups with less than five staff to global corporates with significant government relations resources. Member feedback suggests that smaller companies are often disadvantaged as the application process is the same and seeking the same level of detail on the company and technology. Internally companies balance up the resources (hours and dollars) required to apply with the probability of winning the grant and are often choosing to not even apply.
  • Add clarification sessions during funding rounds – A mechanism should be created to allow for complex and technical solutions to be communicated and understood beyond the maximum word limits set in grant applications. Although this may add time to the application process, it should also allow for better grant decisions to be made.    
  • Increase leverage ratio of grants from 50% to 70% in national sector priorities – Australian Governments continue to nominate priority sectors, such as the Future Made in Australia agenda, and it should not only prioritise funding but also increase its risk appetite to support and exposure as competing markets are doing (e.g. matching the funding eligibility ratios of the Clean Maritime Demonstration Competition which is a high priority area under UK SHORE).[3]
  • Create a dedicated “SME funding window” within grant rounds for national sector priorities – Allocating a dedicated percentage or amount for SMEs sends a signal that governments value innovation from the wider Australian R&D ecosystem. It should also enable increased confidence from the investment and finance industry that support is available. This could also include slightly amended guidelines to align with the challenges of the commercialisation journeys for SMEs and startups such as matched funding to be accrued from the project start date, not simply the grant approval date.
  • Review the R&D Tax Concession definitions – Increasingly we are hearing that cashflow is the biggest issue for start ups and SMEs. This is only exacerbated during the current cost of living crisis. The Australian Government should take the opportunity to review definitions that fast track payments as most companies will be re-investing this capital back into the company through employing more people, investing in new equipment or progressing domestic and/or international business development opportunities.


Large global technology companies reiterate that it is a global race to attract R&D investment to Australia. Feeback indicates that other comparable markets to Australia (e.g. other developed countries in the OCED and G20) are providing greater financial support to win R&D investment. Large corporates are generally risk-adverse in nature and Australia needs to turn this potential roadblock into an opportunity through the identification of incentives and opportunities which facilitate partnerships with the broader industry to solve their decarbonisation challenges.

Several members have highlighted that Australia needs to leverage its strengths to create Australian Government led or supported “Centres of Excellence” (CoEs) in dedicated industry verticals that are aligned to prioritised nationally significant sectors (e.g. hydrogen, green metals, low carbon liquid fuels). This is not a new concept but is a model that global companies recognise and acts as the catalyst to bring international and domestic industry (large and small), other levels of government and R&D institutions together to co-invest in R&D infrastructure, people and programs to solve industrial challenges. 

Increase cohesion between industry and research institutions

The challenge of increased cohesion between industry and research institutions is systemic in Australia. Often there is misalignment between the needs of industry and academic processes. There are myriad schools, centres and faculties within each university or R&D institution across Australia that engage with the hydrogen industry. It goes way beyond the technical fundamentals of chemistry, engineering and physics into social science, economics, risk management, legal, biology, manufacturing and marketing. Some universities have partnered with large corporates to aggregate this internal expertise to better harness the capabilities (e.g. Woodside Monash Partnership), whilst other universities have installed their own aggregation systems (e.g. CQUniversity’s Centre for Hydrogen and Renewable Energy) to interface with industry and provide better industry led solutions. Regardless of the method for aggregation of expertise, the end goal is increased cohesion with possible partners. It is integral that we learn from one another and strive for common goals aligned with national priorities.

CSIRO has provided leadership to bring the Australian universities together and coordinate several hydrogen initiatives that have proved useful. The investment to create the Australian Hydrogen Research Network and the database to act as the single source of truth on Australian research capability and connections is a practical tool that is used globally. The coordination of international R&D delegations to showcase Australian capability whilst visiting globally recognised R&D infrastructure and meeting with global leaders has provided insights to possible international partnerships and Australia’s own opportunities and threats. Industry is seeking greater depth of feedback and insight from these government funded initiatives.

AHC notes that Cooperative Research Centre (CRC) programs have been successful platforms for increased industry and university collaboration and cooperation. This is highlighted further through the CRC-Projects (CRC-P) Program which has broad deep-technology market acceptance as the exemplar for government grant programs, being led by startups/SMEs, and with clear IP ownership for the Lead SME Partner. We have witnessed over the past 12 months an increase in webinars, workshops and reports that CRCs are developing to share their findings to a wider audience. We acknowledge the difficult balance required to manage expectations, IP protection and commercial contractual obligations to undertake the wider communication.     

To increase the cohesion, the different parties need to be striving for common goals, understand their roles and be able to track progress. In our submission to the refresh of the National Hydrogen Strategy[4] we recommended that the Australian Government, through the leadership of the Office of the Chief Scientist, lead industry R&D work programs which are aligned to national significant priorities that:

  • Quantify required Australian public investment in that specific priority to 2040.
  • Establish timeframes and milestones for delivery.
  • Establish and manages a knowledge sharing approach with key international parties, such as the US DOE National Laboratories and the German Fraunhofer Institute.
  • Align with other support for Australian innovation such as FMIA Innovation Fund, National Reconstruction Fund, as well as include dedicated funding for attraction of cleantech scale ups looking to expand to Australia, particularly from the Asia Pacific region.
  • Establish annual public reporting on each of the above.  


Given increased geopolitical risks, increased tariffs, and the focus on national and fuel security, this is more relevant today than it was when we first formally recommended this in 2023.

Opportunity to create a National Hydrogen Testing and Prototyping Centre 

The AHC has previously recommended the need to establish a National Hydrogen Testing Prototyping Centre to the refresh of the National Hydrogen Strategy and it remains relevant today.

Given software is IT based, its testing, prototyping and iterating processes are relatively cheaper than hardware solutions. Hardware innovations such as electrolysers and storage are extremely expensive to commercialise and test, including safety testing-to-certification, as they require bespoke components and machinery to build, and hazard areas to test. Anecdotally, many startups and SMEs have expressed that coordinated and funded soft common user infrastructure, such as testing facilities with all the adequate machinery and other equipment, would not only save them time and money but could be a draw card for international startups to set up in Australia. Technology accelerators and incubators exist across a range of emerging industries, however, there are no dedicated comparable programs for clean tech more broadly or hydrogen specifically. Startups and SMEs are not seeking free access to testing facilities and are willing to pay for access; the issue is that there is no facility and therefore unnecessary and expensive duplication is occurring across Australia, and opportunities are missed.

Overall this would increase the attractiveness of investing in R&D in Australia by filling a critical gap in Australia’s hydrogen and clean technology innovation ecosystem. Currently, those without access to necessary testing machinery or equipment in-house may be forced to move R&D efforts overseas or to not undertake these activities at all.

Recommendation 1

Review existing R&D programs to remove bottlenecks and maximise opportunities. This includes:

  • Simplifying application processes.
  • Adding in clarification sessions during funding rounds.
  • Increasing the leverage ratio of grants from 50% to 70% if aligned with national sector priorities.
  • Creating a dedicated “SME funding window” within grant rounds for national sector priorities.
  • Reviewing the R&D Tax Concession definitions.


Recommendation 2

Develop Australian Government led or supported Centres of Excellence in dedicated industry verticals that are aligned to prioritised nationally significant sectors.

Recommendation 3

Coordinate knowledge sharing and lead industry R&D work programs that:

  • Quantify required Australian public investment in that specific priority to 2040.
  • Establish timeframes and milestones for delivery.
  • Establish and manages a knowledge sharing approach with key international parties, such as the US DOE National Laboratories and the German Fraunhofer Institute.
  • Align with other support for Australian innovation such as FMIA Innovation Fund, National Reconstruction Fund, as well as include dedicated funding for attraction of cleantech scale ups looking to expand to Australia, particularly from the Asia Pacific region.
  • Establish annual public reporting on each of the above.  


Recommendation 4

Establish common soft user infrastructure, such as a National Hydrogen Testing and Prototyping Centre in Australia

The AHC understands this is a complex issue that needs deep consideration and wide engagement across Australia and beyond. If you wish to discuss this submission or any ideas in further detail, please contact me at [email protected] or 0400 178 451.

Kind Regards,

Leigh Kennedy
General Manager, Industry and Supply Chain Development
Australian Hydrogen Council

[1] AHC (2023) A fit-for-purpose refreshed National Hydrogen Strategy: next steps for building Australia’s hydrogen industry, 17 August, https://aidc.org.au/ahc-publications/.

[2] Albanese, A. (2025) Doorstop interview – Whyalla, Australian Government, speech, 20 February, https://www.pm.gov.au/media/doorstop-interview-whyalla-0

[3] Innovation Funding Service (2025) Clean Maritime Demonstration Competition 6: Smart Shipping, UK Government, https://apply-for-innovation-funding.service.gov.uk/competition/2120/overview/d5dd7bfe-a341-44e7-9248-8c5885b4b1af#eligibility.

[4] AHC (2023) A fit-for-purpose refreshed National Hydrogen Strategy: next steps for building Australia’s hydrogen industry, 17 August, https://aidc.org.au/ahc-publications/.