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Papua New Guinea

Papua New Guinea (PNG), officially known as the Independent State of Papua New Guinea, is a tropical archipelagic nation situated in Oceania. It shares a land border with Indonesia and is flanked by Australia to the south, Nauru and the Solomon Islands to the east, and the Federated States of Micronesia to the north. As of 2023, PNG’s Gross Domestic Product (GDP) stood at approximately USD 30.73 billion.[1] The industrial and services sectors dominate the economy, jointly accounting for nearly 78 per cent of the GDP, while agriculture contributes about 17 per cent.

 

The industrial sector is driven largely by mining and oil & gas industries, which hold significant economic importance. PNG is rich in mineral resources including gold, silver, copper, and cobalt. The nation’s cobalt reserves are estimated at 62,000 tonnes, with a production capacity of 2,800 tonnes as of 2024.[2] 

 

Liquefied Natural Gas (LNG) is another key export commodity, alongside gold, silver, and crude oil. In 2023, PNG exported approximately 11 billion cubic metres of LNG, mainly to Japan and China.[3] LNG contributed around 45 per cent of the country’s total export earnings that year.

 

PNG’s energy mix is heavily reliant on fossil fuels, particularly oil, gas, and diesel. Fossil fuel-based power accounted for about 70 per cent of PNG’s installed electricity capacity (1,035 MW), with the rest coming from renewables such as hydropower (261 MW), solar, and geothermal.[4] Hydropower makes up nearly 78 per cent of PNG’s renewable capacity, though many installations are small and decentralized.[5]

 

To reduce emissions and diversify its energy sources, PNG has committed to an ambitious carbon-neutrality target by 2050, including a 30 per cent GHG emission reduction by 2030.[6] The country aims to increase the share of renewables in its installed power capacity to 78 per cent by 2030, thus opening up opportunities for renewable-based energy solutions, including green hydrogen.

 


 

General Information

Green hydrogen represents a transformative opportunity for Papua New Guinea (PNG) to achieve its carbon neutrality goals and expand its clean energy export portfolio. With abundant baseload geothermal and hydropower resources, PNG is well-positioned to become a major producer of green hydrogen.

Although Papua New Guinea has not yet published a formal national hydrogen strategy, policy directions are emerging with clear government intent. 

The Honourable Prime Minister, Mr. James Marape, has announced the government’s vision to produce up to 2.3 million metric tonnes per annum (MMTPA) of green hydrogen domestically. [1]

While PNG does not currently have a dedicated regulatory framework for hydrogen, it is expected that the forthcoming roadmap will include provisions to support infrastructure development, safety standards, and commercial uptake of hydrogen technologies.


 

Infrastructure

Papua New Guinea has a diverse renewable energy base, with significant potential in hydropower, geothermal, solar, and wind energy:

  • Hydropower is the cornerstone of PNG’s renewable generation. As of 2023, the country had 267 MW of installed hydropower capacity, supplying approximately 850 GWh of electricity. Despite this, PNG is utilising only a fraction of its estimated 251 GW hydropower potential (IRENA). [1]

  • Geothermal energy is another strong prospect. PNG lies on the seismically active “Ring of Fire,” with current geothermal capacity at around 50 MW. Estimates suggest a potential of 4.3 GW, especially in high-temperature zones beneath volcanic regions. This resource is especially attractive for baseload green hydrogen production. [2]

  • Solar energy resources are moderate, with Global Horizontal Irradiance (GHI) ranging between 3.31 to 5.40 kWh/m²/day and Direct Normal Irradiance (DNI) values of 1.42 to 4.16 kWh/m²/day. [3] The central highlands, including Mount Hagen, show higher irradiance levels, making decentralised rooftop PV systems a viable solution for community-scale hydrogen generation.

  • Wind energy potential exists both onshore and offshore. Onshore wind speeds vary across regions, while offshore wind projects, especially floating installations in deeper waters, could be promising due to higher capacity utilisation rates. [4]

  • PNG lacks a domestic natural gas distribution network, with only one existing pipeline (~700 km) linking gas fields to the PNG LNG plant in Port Moresby. This limits the potential for hydrogen-natural gas blending.

  • PNG has 23 declared ports, 15 of which are run by PNG Ports Corporation. A USD 435 million upgradation program (PNG Ports Master Plan) is being implemented with support from the Australian Infrastructure Financing Facility for the Pacific (AIFFP). [5] This modernisation can support green hydrogen and ammonia trade logistics.

  • While PNG receives high rainfall (250–350 mm/month), only 41 per cent of the population has access to safe drinking water. [6] This makes water access a key determinant for selecting green hydrogen project locations, especially where desalination may be required.


 

At present, Papua New Guinea does not have local manufacturing capability for hydrogen equipment such as electrolysers or storage systems. However, with the development of large-scale hydrogen projects and international partnerships, PNG could gradually develop ancillary manufacturing and assembly capacity.

Future investment in modular electrolyser systems, containerised storage, and port-integrated hydrogen logistics hubs could enhance PNG’s domestic value chain. The government’s aspiration to integrate hydrogen into clean metal refining and green ammonia production may also create future industrial anchor demand for local hydrogen equipment assembly.

PNG’s most prominent green hydrogen project was announced by Fortescue Future Industries (FFI) under a master development agreement signed in 2021. [1] The proposed project aims to:

  • Produce 2.3 MMTPA of green hydrogen,

  • Utilise approximately 5 GW of renewable energy (including hydropower and geothermal),

  • Serve both domestic needs and export markets (including green ammonia).

The project is still in its feasibility and early-stage development phase and could mark a major leap in hydrogen adoption for PNG if implemented.

Additional areas with potential project pipeline development include:

  • Small-scale decentralised hydrogen systems for rural electrification,

  • Industrial use in oil refining and the mining sector, and

  • Green ammonia production linked to port development for export.

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