Hydrogen is being investigated as a new export method for Australia's wind and solar energy resources.
Australia could sell hydrogen to Asia as a future alternative to gas or coal exports.
The Australian Renewable Energy Agency is spending $20 million on research and development of the technology which could have demand from Japan and South Korea.
Both countries are considering converting transport fleets to hydrogen rather than batteries, opening up a potential new energy export market, chief executive Ivor Frischknecht told a Senate hearing on Tuesday.
He said it'd be a multi-decade initiative to find the best way to export wind and solar resources.
Options include direct cable links to places like Indonesia or Singapore, upgrading minerals exports to have additional energy included or export via carriers like hydrogen, ammonia or fertiliser.
In the case of hydrogen, the electricity generated by wind or solar can be used to split water into hydrogen and oxygen, so the hydrogen can become a fuel source.
If Japan and South Korea go ahead with hydrogen for transport it would create demand for liquid or highly compressed hydrogen.
Advantages include faster refuelling, but Mr Frischknecht warned it's currently a more complicated and less mature technology with greater energy loss in the electricity-hydrogen-electricity conversion.
Hydrogen projects could be backed by the Clean Energy Finance Corporation provided there's a renewable component, chief executive Ian Learmonth told Senators.
"It's certainly, (we) believe, a market of the future," he said.
But no commercially viable projects have so far been put forward.
Around 50 applications have been received by ARENA for research and development funding which will be granted by an expert panel in the coming weeks.
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