Hydrogen company Hysata to begin making new electrolyser at Port Kembla

An Australian company is set to begin mass producing the world's most efficient hydrogen electrolyser, claiming it will be the building blocks for the decarbonisation of heavy industry.

Hysata has opened its commercial manufacturing plant in the Wollongong suburb of Port Kembla, where it will soon begin building hydrogen electrolysers.

Hydrogen is seen as the fuel source most viable to become a substitute for the fossil fuels used in hard-to-abate industries such as steelmaking and transport.

An electrolyser produces hydrogen by using electricity to split water, or H2O, into its component parts.

"Hysata has developed a way to do that in a really energy efficient matter, in fact we use 20 per cent less energy than any incumbent electrolyser today," chief executive Paul Barrett said.

"That really moves the needle on efficiency that saves the people that run electrolysers a lot of power and saves them a lot of money."

Once fully operational, the commercial plant will supply about 20 electrolysers per year, or roughly 100 megawatts worth of generation capacity.

A landmark report modelling Australia's pathway to carbon neutrality by 2050 finds the country's biggest power grid will need to triple in size within eight years.

Energy Minister Chris Bowen said it was a "big deal" for Australia's decarbonisation goals.

"This means driving down the cost of renewable hydrogen, vital to reducing emissions in steelmaking and so much more," he said.

Hysata received a $20.9 million grant through the Australian renewable Energey Ageny to build its first five-megawatt demonstration plant.

It will be deployed alongside the Queensland government-owned Stanwell coal-fired power station in Rockhampton in 2025.

The work is expected to create 44 jobs with the company aiming to grow its team to more than 200 employees in the next couple of years.

Hysata's technology has also attracted foreign attention.

"We have burgeoning demand for our technology," Mr Barrett said.

"Southeast Asia, Europe, United States, the phone is ringing hot with all the commercial demand we have."

Hysata's warehouse is based on the doorstep of one of Australia's largest emitters, BlueScope Steel.

BlueScope will soon vote whether to endorse a $1 billion reline of a mothballed blast furnace, a move which would lock the steelmaker into using coal to make steel for another two decades.

The current main blast furnace is set to reach its end of life between 2026 and 2030.

BlueScope has previously claimed low emissions iron and steelmaking technologies were unlikely to be commercially viable before the current blast furnace reached its end of life.

The steelmaker also said the blast furnace provided a bridge to emerging technologies such as hydrogen.

Australia's former chief scientist Alan Finkel, who is an advisor to Hysata, said efficient electrolysers and abundant green energy was essential to the viability of zero-emission steelmaking.

"You need very cheap electricity, and you need very cheap hydrogen, and together the electricity in hydrogen replaces the metallurgical coal that is used in the blast furnace," Dr Finkel said.

"We need to get everything right, we need the solar and wind electricity production so there is cheap electricity, and we need to have highly efficient manufacturing of hydrogen.

"We can then bring the inexpensive green hydrogen together with the inexpensive green energy to produce the first step in steelmaking which is green iron."