Damon Buckley, our Chief Financial Advisor, discusses Green Hydrogen investment in Asia
Green Hydrogen Asia Sdn Bhd is excited to have Damon Buckley as our Chief Financial Advisor. Damon has over 25 years of professional experience in the commodity, finance, agriculture, resources, and energy sectors with extensive transactional experience as a senior manager involved in complex financial and commodity transactions with organisations such as BHP Billiton, ICBC-Standard Bank, Deutsche Bank, Woodside Energy and Western Australian Treasury Corporation. Damon is a commercial and finance specialist with executive management and director roles, focusing on business development, finance, economics, agriculture business, resource projects, stakeholder engagement, and general management, including governance, transparency, accountability, and organisational change.
Since returning to Perth in 2016, Damon has established his own consulting business, Beechwood Consulting. He has provided advice to clients in the resources sector in business development, energy, hydrogen, financial management, agriculture and international commodity marketing.
• What is your background in Asian finance?
I have worked in banking and finance within two large investment banks in Singapore – Deutsche Bank and ICBC Standard Bank. In 2014, I was promoted to Managing Director within ICBC Standard Bank and responsible for leading a team of ~20 finance, banking, trading and commodity sales professionals across the UK, Singapore, and China in Bulk and Energy Markets. ICBC Standard Bank Plc is a global markets banking specialist offering Commodities and Fixed Income, Currencies and Equities products focusing on emerging markets and commodities, headquartered in London.
At Deutsche Bank, I was appointed to a sales and origination role with business development accountability in South East Asia, China, South America and Japan to meet with customers from the steel mills and work with financing, marketing, trading and risk management structures.
• Is green hydrogen financially viable in Asia/Malaysia?
In evaluating the economics of several hydrogen projects, the opportunity for Asia/Malaysia is to deliver affordable hydrogen to accelerate the global energy transition in various applications such as heavy haulage transport markets. The economic analysis of hydrogen projects indicates that green hydrogen offers sufficient potential for economically generating hydropower, solar or wind to provide an economically sound alternative to diesel in transport markets in South East Asia.
The increasing economic feasibility of renewables-generated hydrogen in South East Asia, including Malaysia, will be driven by five key developments:
A reduction in the cost of hydrogen electrolysers. Advances in technological understanding and economies of scale are leading to a significant fall in prices;
Low-cost finance and government-backed funding opportunities to transition away from hydrocarbon industries.
Low- or zero-cost prices for electricity generated by renewable sources. As a surplus availability of hydro, solar and wind generated electricity becomes more frequent, it will likely become increasingly economically viable to store electricity as hydrogen;
Scale and maturity of H2 infrastructure. As the H2 industry develops, the market will create the required infrastructure to scale H2 production and market offtake opportunities significantly. The more uses there are for green hydrogen, the more produced, and the cheaper it will become.
Government taxation of carbon and GHG emissions. The expectation is that governments committed to the Paris Climate Accord introduce carbon taxes and incentives for low-carbon/emission solutions as industries transition away from fossil fuels and diesel.
As a signatory to the Paris Agreement, Malaysia has committed to reducing greenhouse gases by 45% by 2030. This commitment by Malaysia consists of 35% of unconditional and 10% conditional bases upon receiving climate finance, technology transfer, and capacity building from developed countries. The opportunity for Malaysia to target specific investment in green energy/hydrogen projects provides an option, even at a small scale, to enable areas and industries to lead the transition away from hydrocarbon reliance and meet their obligations under the Paris Agreement.
• Why are GH2 projects worth investing in?
Across the globe, there is a growing number of investments in green hydrogen developments in the renewable industry sector. In 2020, the reported pipeline of planned green hydrogen projects globally exceeded 60 gigawatts, roughly the equivalent of 187.5 million solar cells. As the hydrogen market grows in Asia, the improvement in the economics of green energy will improve with lower production costs that will likely lead to more significant investment into potential new hydrogen production.
In Asia, opportunities in green hydrogen production capacity are expanding, and there are already in developing several projects to use renewable energy in electrolysis to split water into oxygen and hydrogen:
In Japan, a demonstration project designed to create hydrogen from wind power was launched in Yokohama, Japan, and has been running since 2017.
In China, Siemens Energy is building a 1 MW hydrogen production system for a fueling station in Beijing, which will be the country's first-megawatt green hydrogen production project. The hydrogen fueling station is located in three main competition areas for the 2022 Winter Olympics.
In Australia, Asian Renewable Energy Hub (14 GW) in Western Australia plans to produce 9.9 million tonnes of green ammonia per annum. The recent announcement of several other green hydrogen projects in Australia has indicated significant investor and government support for the sector.
One of the biggest reasons Malaysia would consider investing in green hydrogen is that they currently produce a large amount of hydrogen through fossil fuel methods. This means that Malaysia investing in green hydrogen in the immediate term could accelerate the replacement of heavy polluting hydrocarbons, allowing for a faster decrease in the nation's carbon footprint and reducing reliance on the price and volatility of global hydrocarbons.