The Queensland government has announced $750,000 will be allocated in next month's state budget to start developing hydrogen as a viable renewable energy source.
Premier Annastacia Palaszczuk made the announcement from Japan where she is conducting a trade mission.
Ms Palaszczuk said with her government already backing the development of renewable energy industries in Queensland, the state was well placed to explore hydrogen development.
"Japanese companies are pursuing a number of different technologies in an effort to bring hydrogen to market as a credible alternate source of renewable fuel," the premier said in a statement.
"As this technological process unfolds, Queensland has the raw materials that can put us at the front of an energy revolution."
Hydrogen, the simplest and most common of all the elements, is currently sourced from natural gas, however Japanese researchers among others are trying to produce renewable hydrogen from solar power and renewable organic sources such as green waste.
It comes after the head of the Australian Renewable Energy Agency, Ivor Frischknecht, last week told a federal senate hearing that Australia could become the major exporter of hydrogen to Japan, South Korea, Indonesia or Singapore.