Sarawak’s two flagship hydrogen projects have been scaled down over signs of weak demand, says the Energy Industries Council (EIC).
The EIC said the H2biscus and H2ornbill projects reduced their planned production capacity last year, reflecting uncertainty in obtaining offtake deals, Borneo Post reported.
This is despite Sarawak leading the way in hydrogen development in Malaysia, it added.
“Through strong government support and strategic collaborations with Japan and Korea in developing the projects, Sarawak is currently the most advanced state in terms of project implementation and development.
“However, some headwinds were identified in 2025 such as the reduction in the production capacities of Sarawak’s H2biscus and H2ornbill projects due to a lack of demand signals,” said the council.
The EIC is the largest energy trade association globally.
Five green hydrogen projects are being built in Sarawak, with the facilities expected to commence operations in 2029.
Led by SEDC Energy Sdn Bhd, the H2ornbill project is being set up in partnership with Eneos and Sumitomo Corp, involving two hydrogen plants with a targeted clean hydrogen production of 90,000 metric tonnes a year by 2030.
The H2biscus project, a partnership with Samsung Engineering, Posco, and Lotte Chemical, involves hydrogen derivative facilities with a capacity of 150,000 metric tonnes annually.
The Sarawak government has set its sights on exporting green hydrogen by 2030 and becoming Asean’s green hydrogen hub.
The state launched its hydrogen initiative in 2019 with an initial production of 130kg per day to power five hydrogen buses in Kuching.
The EIC previously acknowledged that the abundance of hydropower gave Sarawak an edge in hydrogen projects as it provides for competitive renewable energy prices in the production of green hydrogen.
