The Tasmanian Government is spending $50 million to develop a hydrogen energy industry in the state.

Tasmania's draft Renewable Hydrogen Action Plan (PDF) includes $20 million for a Tasmanian Renewable Hydrogen Fund, $20 million in concessional loans and $10 million dollars for support services.

Premier Peter Gutwein says the state wants a renewable hydrogen generation facility up and running by 2022-2024.

The Government is looking at Bell Bay in the state's north and Burnie in the north west as potential hydrogen industry hubs.

“Our vision is to … be commercially exporting hydrogen by 2030, creating hundreds of local jobs and injecting billions into the Tasmanian economy,” Mr Gutwein said.

Hydrogen gas is produced by splitting H2O into hydrogen and oxygen atoms through electrolysis.

That gas can be condensed into a liquid fuel source, which can be used to power some new-generation cars and generate electricity.

Energy Minister Guy Barnett said the first stage of the efforts will involve a 100-megawatt renewable hydrogen production facility.

“Bell Bay is well suited to host a 100MW facility and has the capacity to expand to a 1,000MW facility by 2030 and expand further if national and international demand grows as predicted,” he said.

“The plan indicates that a 1,000MW renewable hydrogen facility (approximately enough power for 1 million households) would create an estimated 1,000 to 1,200 local jobs, and support a further 2,000MW of renewable energy investment in our state.”

Expressions of interest will be open in coming weeks.