A major Australian green hydrogen project was left in uncertainty on Tuesday after the Queensland state government withdrew its support, dealing a setback to the country’s renewable energy goals, reports ET Manufacturing.
The project, planned for central Queensland, aimed to produce low-emission hydrogen fuel for export to countries such as Japan and Singapore. While the Australian government has pledged US$40 million for its construction, Queensland officials pulled out on Monday night, citing rising costs.
Federal Climate Change Minister Chris Bowen called the state’s decision both unexpected and disappointing.
“Australia has a great opportunity in green hydrogen, and we are committed to developing an industry that is crucial for manufacturing and energy both here and around the world,” he said in a statement on Tuesday.
It remains unclear whether the project can proceed without support from the state government. Bowen said it would now be up to the companies involved to decide whether to move forward.
The project’s partners include Japan’s Iwatani Corporation and Marubeni Corporation, along with Singapore-based asset manager Keppel.
A spokesperson for the Queensland government said the cost of building new infrastructure and shipping facilities would have reached several hundred million US dollars, making it financially unviable for the state.
The Australian government has plans to build seven hydrogen production hubs across the country. These facilities would use solar and wind energy to split water into hydrogen and oxygen through electrolysis. The hydrogen would then be liquefied and exported to be used in industries such as steel manufacturing as a cleaner alternative to fossil fuels.
Countries including Japan, Germany, and Singapore are seeking reliable supplies of hydrogen fuel. However, green hydrogen projects have faced challenges due to high costs and technical difficulties.
In October, Australian energy company Origin Energy abandoned a planned hydrogen plant, saying the global market was not developing as fast as expected. Earlier in the year, mining billionaire Andrew Forrest also cancelled similar plans.
The International Energy Agency has noted that several hydrogen projects worldwide have been scrapped due to financial difficulties, regulatory challenges, and uncertainty about demand.
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