Bell Bay has been earmarked as a potential site for a regional hydrogen hub under a new initiative by the federal government.
Prime Minister Scott Morrison will announce the funding as part of the upcoming federal budget, which includes a total $539.2 million in new clean hydrogen, carbon capture, use and storage projects.
The funding package includes $275.5 million to develop four additional clean hydrogen hubs in regional Australia.
The federal government as identified Bell Bay as a highly prospective location for one of the hubs.
Other locations being considered are Pilbara (Western Australia), Gladstone (Queensland), La Trobe Valley (Victoria), Eyre Peninsula (South Australia), Hunter Valley (New South Wales and Darwin (Northern Territory).
The hubs are expected to be announced in 2022 and its estimated will bring 1000 jobs to each location.
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It's not the first time Bell Bay has been identified as a key site for hydrogen production, in January Western Australian company Woodside signed an agreement with Tasmanian company TasGas.
The state government threw its support behind the project by signing a memorandum of understanding with the two parties.
State Growth Minister Michael Ferguson said at the time the support offered to the pilot project would strengthen the chance for Woodside to be granted funding.
"We're giving Woodside their best opportunity to prove to ARENA that there is government support ... that there can be a development here that will generate jobs to decarbonise industry, to provide a new source of energy," he said.
Bell Bay also features in the state government's Renewable Energy Action Plan as the preferred site in the North for the fledgling industry.
At a "hydrogen 101" crash course for businesses last week Keen Partners' Ray Mostogl said it had been eye-opening.
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"It is really to inform business that maybe considering getting into the hydrogen industry what is involved in the industry, the production of hydrogen, how it gets used and how to put systems in place," he said.
"I've learnt an awful lot ... I think it is demystifying it a bit in terms of what has happened, what is happening and what is still under development."
Prime Minister Scott Morrison said the world was changing rapidly and Australia will need to be competitive in a new energy economy to support the jobs of Australians, especially in our heavy industries and regional areas that depend on affordable and reliable energy.
"It is essential we position Australia to succeed by investing now in the technologies that will support our industries into the future, with lower emissions energy that can support Australian jobs," he said.
Minister for Energy and Emissions Reduction Angus Taylor said the federal government was backing practical, technological solutions to reduce emissions, not big new taxes.