ACT minister for sustainability Shane Rattenbury said that he had argued unsuccessfully at the National Energy Council for the Federal government to only support green or renewable energy for hydrogen projects.

While it may appear to be a gilt-edged opportunity lost for the ACT, Mr Rattenbury is adamant that future demand is for "green" hydrogen, not coal-derived "brown" hydrogen.

He maintains it is not clean energy, as the Federal government purports, when it needs the burning of coal to produce it.

The Federal government says it can justify the description because it aims to offset the use of fossil fuel through carbon capture and storage.

"As the ACT has reached 100 per cent renewable electricity, we are now focusing on reducing emissions in other sectors, particularly transport and gas, and hydrogen may have applications in these sectors," Mr Rattenbury said.

Hydrogen is regarded as the world's "future fuel" because by feeding it into a fuel cell, it creates electricity, no emissions and only water as the byproduct.

But ironically an off-the-shelf electrolyser - which "splits" water into its constituent parts - requires significant amounts of electricity to produce relatively small volumes of hydrogen fuel.

The higher the cost of the electricity "feedstock", the more expensive the hydrogen fuel outcome becomes.

ActewAGL had been on target to have Australia's first publicly-accessible hydrogen refuelling station up and running at its Fyshwick site by around this time but the intervention of the coronavirus pandemic has prevented the travel to Canberra of the technicians who can set up the electrolyser.

Meanwhile, the 20 Hyundai Nexo fuel cell cars which will be part of the ACT government fleet under the new pilot project have arrived from Korea and are parked in Sydney, waiting on delivery to the ACT.

The $300 million funding pool from the Federal government fulfils a financial commitment made back in November last year with the announcement of the national hydrogen strategy.

Now the funding has arrived, large scale pilot projects involving heavy duty transport are already being planned by other states.

Canberra's contribution will be much more modest, including a gas-blending project by Evoenergy, in which hydrogen is blended with natural gas in the existing network to reduce CO2 emissions.

Canberra's contribution also may well be more academic in nature.

"As a small jurisdiction with leading academic and research institutions, the ACT is well positioned to play a role in the emerging hydrogen knowledge economy," Mr Rattenbury said.