Alumina refining accounts for about a quarter of Australia's direct, non-electricity manufacturing emissions, or 14 million tonnes a year.

The federal government is providing up to $580,000 through the Australian Renewable Energy Agency for Rio Tinto's Yarwun refinery in Gladstone to use renewable hydrogen instead of natural gas to generate the high temperatures needed to turn bauxite into alumina in the calcination process.

Energy Minister Angus Taylor said it was an important step in securing the future of a sector which employs more than 22,000 Australians.

"Replacing higher-emitting alternatives with cleaner energy sources will reduce the carbon footprint of our energy-intensive industries and enable them to continue operating for decades to come," he said.

Australia is also the world's largest exporter of alumina and accounts for around 15 per cent of global refining capacity.

The central Queensland city of Gladstone has been identified as a potential location for one of five hydrogen hubs across the country.

The hubs will co-locate hydrogen users, producers and exporters, helping to reduce costs and share information.

Other areas identified for potential hubs are Bell Bay (Tasmania), Pilbara (WA), Townsville (Queensland), La Trobe Valley (Victoria), Eyre Peninsula (SA), Hunter Valley and Illawarra (NSW), and Darwin (NT).

Rio Tinto's Daniel van der Westhuizen said the project, which would also involve research in Melbourne, would be important not only for Australia but for the global aluminium industry.

The company is aiming to reach net zero emissions across its operations by 2050.

It is targeting a 15 per cent reduction in absolute emissions and a 30 per cent cut in emissions intensity by 2030, from a 2018 baseline.

Australian Associated Press