A hydrogen export industry needs to be established "quickly" in Northern Tasmania to avoid the state missing out as other countries look to tap into the predicted $215 billion global market in three years, business leaders say.
Bell Bay has been identified as the likely location to set up a hydrogen production facility where over 1000 people could be employed, making use of the deep port with access to high voltage power, water and labour.
Japan and South Korea have developed a shortfall of hydrogen as they attempt to decarbonise their economies, opening up new export opportunities for Australia.
Northern Tasmania Development Corporation chairperson John Pitt said hydrogen has been earmarked as providing one quarter of Northern Tasmania's export growth over the next 10 years.
"The world market is developing at a much faster rate, so the demand for export hydrogen is now establishing itself, and over the next 10 years it could become very large, and eventually as large as our natural gas LNG exports," he said.
"Even at the low end of the scale, we could deliver Tasmania's fifth or sixth largest export industry from a standing start."
The facility would use renewable energy to electrocute drinking water through a process called electrolysis, splitting it into hydrogen and oxygen. It can be exported as liquid hydrogen, or combined with nitrogen to create ammonia.
Hydrogen is then used to power anything that requires energy, replacing sources such as diesel and coking coal.
A 50,000 tonne per annum hydrogen facility would require a similar amount of water as a 5000 to 6000-person town, Mr Pitt said.
"It's not all that huge compared to other industrial developments that we've looked at in the past," he said.
Labor has promised $250,000 for a business case into establishing a hydrogen production facility in Northern Tasmania, where it is expected to be among the top three production areas in Australia. It is part of a $1.14 billion National Hydrogen Plan.
The study will be complete by the end of this year, should Labor win the election.
Labor assistant energy spokesperson Pat Conroy said transportation was becoming a key user of hydrogen.
"There are projects happening in other parts of the country, and the real opportunity is to scale it up quickly to satisfy global need," he said.
"It's up to Tasmania to seize the opportunity ... to identify what the opportunities are in Tasmania."
Small and family business minister Michaelia Cash was also in Launceston on Wednesday to launch the Launceston Small Business Fair.