Developers have dumped a $14 billion green hydrogen export project, despite almost $90 million in federal government funding commitments.
The Central Queensland Hydrogen Project (CQH2) had been touted as one of Australia’s biggest green hydrogen projects and was hailed as a pathway to helping achieve net zero emissions targets.
State-government owned energy company Stanwell said this morning it had withdrawn its support for CQH2, as well as other hydrogen development activities.
“The 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,” a Stanwell spokesperson said.
The CQH2 project planned to begin exporting green hydrogen to Japan and Singapore by 2029.
Supporters said CQH2 would grow the region’s economy by $8.9 billion. (Supplied: Stanwell)
The cost was originally estimated at $12.5 billion, but a 2022 feasibility study found it had blown out to $14.75 billion.
The ABC understands the consortium behind the project no longer exists.
Supporters argued it would grow central Queensland’s economy by $8.9 billion and help create thousands of new jobs.
Green hydrogen is a fuel source extracted from water using a renewable energy source such as solar.
The Queensland government earlier this year withdrew their funding commitment with Treasurer David Janetzki arguing the financial demands were too high.
He said at the time it would have required more than $1 billion in state government funding.
Federal Energy Minister Chris Bowen said that decision made the project’s viability “very difficult”.
“It’s a sad day for the people of Gladstone as all those potential jobs will not come to fruition,”
he said.
“More broadly, while facing headwinds, green hydrogen will continue to play an important role both in decarbonising global industry and creating Australian jobs.”
Mr Bowen said further announcements for the Hydrogen Headstart program, which supports the development of large-scale renewable hydrogen projects, would come “quite soon”.
The federal government had already spent $20 million on an engineering and design study for the project, while more than $69 million had also been committed through its regional hydrogen hubs program.
‘Derailing new industries’
Queensland Conservation Council’s Gladstone spokeswoman Emma Smith said she was disappointed the project would not proceed.
“CQH2 had been doing a lot of groundwork to ensure that their operations in Gladstone could utilise the skills and industry already in our city, and be a welcome addition to our export potential,” she said.
“It is a shame to see that work unravel due to investor uncertainty.“
Emma Smith is Queensland Conservation Council’s regional advocate for Gladstone. (ABC News: Jasmine Hines)
Ms Smith criticised the state government for backing out of the project, and said more needed to be done to support new clean industries.
“The continued attacks on renewable energy and clean industry are jeopardising regional jobs and derailing new industries,” she said.
Local industry facing challenges
It is another blow for the developing industry in Gladstone.
In May, billionaire Andrew Forrest’s company Fortescue abandoned both stages of its hydrogen projects in the city, including a hydrogen electrolyser facility — for splitting hydrogen and oxygen — which was operational at the time.
The former Labor state government had also spent almost $1 billion on the Fitzroy to Gladstone Pipeline, which is due to be completed next year.
The pipeline was planned to shore up the region’s water security, in part for a future hydrogen industry.
Gladstone Mayor Matt Burnett said he was still confident in green hydrogen and its future in the city.
“I’ve seen a lot of projects come through my door,” he said.
“We will continue to welcome all these proponents that are looking to invest in Gladstone.”
