The Australian government has shortlisted seven green hydrogen derivative projects, representing 2.18GW, for production subsidies after halving the amount of funding allocated to the scheme.
Selected under the second round of the Hydrogen Headstart programme, the projects have been invited to submit full applications to secure 10-year production credits. The rate of the credits has not been revealed.
All of the projects shortlisted plan to produce hydrogen for use in chemicals or metals, primarily for use in shipping, aviation, and fertilisers. Full list of projects below.
Full applications will include “detailed due diligence” and are due to be submitted by early September.
However, the Australian Renewable Energy Agency (ARENA) said the government had revised the funding budget from an original AUD $2bn ($1.45bn) to AUD $1bn ($724m), as part of its wider AUD $63.8bn ($46.2bn) savings plan outlined in the most recent budget.
The first AUD $2bn round shortlisted six projects in 2023 but went on to commit AUD $1.2bn ($868m) to just two projects after various schemes dropped out amid lower-than-expected demand.
The drop-outs raised major questions around the government’s hydrogen strategy. However, ARENA CEO Darren Miller said this latest pool of projects was “considered” and “well-aligned” to future market demand.
“Renewable hydrogen is a complex, capital-intensive industry and progress takes time, but it is a critical enabler of industrial decarbonisation, particularly for hard-to-abate sectors,” he said.
Shortlisted projects
Bell Bay Powerfuels in Tasmania, by Abel Energy, aims to produce 300,000 tonnes of methanol per year from 300MW of electrolysis for use in aviation and shipping. It will be built on the site of a decommissioned oil-fired power station.
South East Queensland Power-to-X by European Energy Australia was acquired from a local developer in 2022, and initially aims to produce green methanol from 150MW of electrolysis. Under original plans, it could be scaled to 3.6GW.
Portland Renewable Fuels in Victoria by Hamr Energy plans to use 220MW of electrolysis to upgrade syngas from biomass into low-carbon methanol. It’s currently in early engineering.
HIF Tasmania e-Fuel by HIF Global’s Asia-Pacific business is planned for Burnie, Tasmania, and could produce 210,000 tonnes of e-methanol per year from 140MW of electrolysis. It completed pre-front-end engineering design in 2025 and is undertaking environmental permitting.
Murchison Green Hydrogen Project Stage 1B by Copenhagen Infrastructure Partners’ subsidiary, is the second 500MW phase of a 1.5GW green ammonia project in Western Australia. Stage 1A is also one of the two projects to have secured funding from the first Headstart round.
Perdaman Helios (Karratha) by Perdaman Chemicals and Fertilisers aims to use 750MW of electrolysis to produce green hydrogen for Urea production in Western Australia. It is projected to produce over two million tonnes of urea annually.
Gladstone Green Hydrogen is a 120MW project looking to supply alumina production in Queensland by Sumitomo and Rio Tinto subsidiary Summit Hydro. It would produce 200,000 tonnes of hydrogen per year for use in Rio Tinto’s alumina refinery.
