End of the Road for Key Australian Green Hydrogen Project

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--One of Australia's leading green hydrogen projects has been scrapped after losing key partners and failing to secure more government funding.

The Central Queensland Hydrogen Project (CQ-H2), which was been led by the Queensland government-owned energy company Stanwell Corporation (Brisbane, Queensland), was planned near Gladstone in central Queensland. The first phase was to install up to 720 megawatts (MW) of electrolysers to produce up to 73,000 tonnes of green hydrogen per year for domestic use and export. The plan was to scale the project up to 2.88 gigawatts (GW) of electrolysis capacity to produce more than 1 million tonnes of renewable hydrogen annually. However, Stanwell has issued a brief statement announcing the end of the project, which was at an advanced stage and the largest in the state: "Stanwell has discontinued its involvement in the Central Queensland Hydrogen Project (CQ-H2) project and other hydrogen development activities. The CQ-H2 project has been a valuable international collaboration that has provided important technical and commercial knowledge to support the future large-scale commercialisation of renewable hydrogen." CQ-H2 was one of six successful, shortlisted applicants for the Australian government's AUS$2 billion (US$1.3 billion) Hydrogen Headstart Program. For additional information, see January 4, 2024, article - Six Companies Shortlisted by Australia's Hydrogen Headstart Program.

Late last year, one of the project's key offtake customers, Kansai Electric Power, pulled out, citing higher costs of production than were outlined in the 2021 feasibility study. In February this year, Stanwell failed in its application to get AUS$1 billion (US$614 million) in funding through the Australian Renewable Energy Agency (ARENA). The new conservative-controlled Queensland government rolled back on a pledge by the previous government to back the AUS$1.4 billion (US$919 billion) in federal funding for CQ-H2. Treasurer and Energy Minister David Janetzki stated that it did not align with the new government's focus on maximising value from Queensland's existing generation assets. "It would have required significantly more than AUS$1 billion in state government funding, including infrastructure for water, port, transmission and hydrogen production. We are focused on our energy generators providing affordable, reliable and sustainable power for Queenslanders." A month after this decision, another key project offtake customer left the alliance. Asian media outlet Nikkei reported that Japanese gas company Iwatani Corporation had left the project and closed its Queensland office.

Industrial Info is tracking 34 green hydrogen-related projects worth US$2.7 billion in the state of Queensland. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).