If New Zealand has an over-capacity of energy, it could be sold to other countries.
"Countries around the Asia-Pacific, Japan, and Korea are actively looking for countries to export hydrogen to them – this is potentially a whole new industry for New Zealand."
Greenpeace welcomed the Government's hydrogen plan.
"Hydrogen made using clean, renewable electricity would play an important part in that transition," Greenpeace climate and energy campaigner Amanda Larsson said.
Although she said the announcement appeared to show the Government taking leadership in the face of the climate emergency, she warned that the devil will be in the detail.
According to the discussion paper released this morning: "New Zealand has an abundance of renewable energy that could be used to produce hydrogen as a next-generation fuel in a sustainable way."
The paper looked at green hydrogen that is produced from renewable energy, such as wind and solar.
Woods said the increased commitment to hydrogen meant New Zealand would have to increase the amount of renewable energy that New Zealand has.
"With hydrogen, we have opportunities to create new jobs, convert heavy transport away from fossil fuels, enhance our security of electricity supply and even generate significant export revenue."
Last year, New Zealand signed a world-first memorandum of co-operation with Japan.
Woods said there was already clear international interest in hydrogen sourced in New Zealand.
She said there was already significant investment in hydrogen locally, such as joint ventures between New Zealand based Tuaropaki Trust and Japanese multinational Obayashi Corporation.
The plan – released as a discussion document called the Green Paper – talks about how hydrogen could fit into New Zealand's wider energy and transport system.
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