ESG Focus: Aust Hydrogen Projects Left Hanging

ESG Focus | Apr 26 2023

This story was originally published on 18 April 2023. It has now been re-published after correcting the name and shareholders of the Australian Renewable Energy Hub.

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ESG Focus: Aust Hydrogen Projects Hang In The Balance

As the green hydrogen arms race accelerates and major powers introduce subsidies, what will be the future of Australia’s many multi-billion dollar green (and even blue) hydrogen projects?

-Relatively few green hydrogen projects kicking off globally
-Majors have billions of dollars of projects on the table
-Is Australia willing to step up to the green energy plate?
-Australian companies examine their options post US subsidies
-State by state rundown of major hydrogen projects
-State of hydrogen play among the ASX majors
-ASX-listed hydrogen small caps and minnows

By Sarah Mills

In Part 1 of this series, FNArena observed global non-grey hydrogen subsidies have dampened, if not dashed, Australia’s hopes of becoming a green, blue, turquoise or pink hydrogen superpower.

At the moment, there is not too much skin in the game, but Australia needs to decide whether it is willing and able to play, which is why 2023 is shaping up as a pivotal year for the industry.

Actual funds directed globally towards clean hydrogen to date have been very small relative to total global energy transition investments: US$1.1bn out of US$1.1trn in 2022, according to BloombergNEF. This is even less than garnered by carbon capture and storage.

But clean hydrogen was the fastest growing sector, investment tripling on the previous year. (Hydrogen's main competitor as a grid stabiliser, nuclear energy, was the only low-carbon solution not to register a sharp uptick).

BHP Group’s ((BHP)) Pathways To Decarbonisation report observes that all hydrogen’s (not just green hydrogen) share of final energy demand will sit at 6.5% of the total energy market by 2050. 

BloombergNEF puts that figure at 24% in a strong policy environment - double any other estimate in BHP’s sample, in which the average was about 6.5%. 

The Global Hydrogen Council observes that deployment of green hydrogen projects have been lagging, with only 10% of 680 large-scale hydrogen projects around the world reaching final investment decisions.

Meanwhile, Australia’s political and business leaders, from former Reserve Bank chief Guy de Belle to Fortescue Metals’ ((FMG)) and BHP’s chiefs Andrew Forrest and Mike Henry, are calling on the government to step up.

The ALP is expected to announce its intentions by year-end.

What’s A Few Billion Dollars Here And There

At first glance, the financial hurdle does not appear too high for the Australian government, especially given the recent $300bn AUKUS submarine deal (although the latter certainly makes it financially tougher for Australia as it enters the transition fray).

The IRA and Bipartisan Infrastructure Laws have allocated just over US$20bn out of a total US$370bn in energy funding over 10 years to clean hydrogen according to McKinsey.

Also, the powerful US pretty much took a shotgun approach with its Inflation Reduction Act, supporting nearly every green transition option.

Australia could adopt a more targeted and nuanced approach.

This would require a mammoth policy effort by the new Labor government, which (like its Liberal & Nationals predecessors) has yet to demonstrate leadership in this area. Nor does the government want to get caught dishing out subsidies to unviable projects.

But to fold now, so early in the transition game, and submit to being a critical minerals supplier only would reflect extremely poorly on the government domestically and geopolitically, so some kind of effort is expected.

This is not to mention the fact that the circularity, environmental and health imprimaturs will eventually undermine critical minerals export markets, leaving Australia high and dry.

The question on many lips is: has Australia’s government got what it takes?

Quick recap

We have touched on the problems associated with hydrogen storage and transportation in previous articles; as well as the lack of binding off-take agreements; the limited markets for green hydrogen given the costs versus renewables; the threat of innovation and Paris Accord technical pathways (which BHP’s website observes are “universally positioned on the cautious side of the green hydrogen debate”); and the falling costs of green hydrogen as the industry prepares to scale (UNSW believes green hydrogen could become cheaper than fossil fuels within a few years).

Meanwhile, according to Bloomberg, industry pundits including Fortescue Future Industries observe that green methane, produced by adding carbon dioxide to hydrogen, could be used to ship hydrogen in preference to ammonia or liquefied hydrogen, using existing gas infrastructure, although this option too is not without its challenges.

In this article we list the billions of dollars of hydrogen projects proposed by ASX-listed companies and global majors, some of which hang in the balance pending the Australian government’s response to global subsidies.

The IRA’s clean hydrogen definition includes upstream emissions, including methane leakage from natural gas pipelines, which suggest blue hydrogen won’t qualify for the highest PTC value, not even pyrolysis-based hydrogen, according to Utility Dive.

Australian Companies Examine Their Options

In summary, companies appear to be adopting one of three strategies.

Some are doubling down and attempting to bring forward timelines (profits in the hand can match development subsidies in terms of providing capital expenditure but requires patient shareholders in an era of rising rates, when capital is thin on the ground).

Others are retreating or reshuffling as best exemplified by well publicised issues with some of Fortescue Future Industries’ major projects, such as Sun Cable, and Macquarie Group’s ((MQG)) exit from its Port of Newcastle proposal. A common strategy has been to focus on establishing on-site production facilities in subsidised nations, or to decarbonise mining operations. 

Those with few options are doing nothing, their main hope being some sign of government support and hydrogen tech innovators are likely to continue apace in a dry, less hydrogen-hyped capital market.

A reference article of sorts

This article focuses on the major Australian companies with onshore hydrogen plans but lists the bulk of smaller projects to round it out as a reference for Australian hydrogen projects.

The article includes blue, turquoise and green hydrogen projects, and some of the larger offshore investments in the sector.

Australia’s Global Green Hydrogen Prospect

PwC estimates companies have pledged more than $250bn to develop clean hydrogen in Australia and the CSIRO has identified a dozen or more advanced hydrogen projects.

Some of this investment is aimed at supplying domestic demand, but the bulk of green hydrogen is intended for export markets.

Prospective importers include Belgium, Germany, Japan, The Netherlands and South Korea.

Under EU standards, all green hydrogen must be powered by investment in new renewables, which means green hydrogen producers will not be able to cannibalise existing renewables resources. 

This means all green hydrogen developments intended for European exports must be accompanied by investment in renewable infrastructure – emphasising the size of the renewables prospect.

Renew Economy’s interview with Rystad Energy's renewables analyst David Dixon concludes NSW is the state with the most potential to produce cheap green hydrogen, followed closely by Victoria and SA.

In terms of subsidies, the $15bn National Reconstruction Fund can provide cheap loans and investments to the industry.

Meanwhile, the 2019 national hydrogen strategy is under review.

Australian companies are also establishing operations in subsidised nations.

Global uptake will be critical to Australia’s green hydrogen hopes and that is a battle currently being waged between battery storage, nuclear energy and green hydrogen and will hinge on innovation.

Green hydrogen is cleaner than battery storage, which is one mark in its favour.

Major projects State By State

Here we list some of the major green hydrogen projects in each State and Territory.

Western Australia:

-$50bn mooted Asian Renewable Energy Hub in WA’s Pilbara – major investors include Fortescue Future Industries and BP (FID expected in 2025).

-$10bn-plus Murchison Renewable Energy Project in WA led by Copenhagen Infrastructure Partners (FID early 2025).

-8GW HyEnergy Project through Province Resources and France’s Total Eren.

-$150m Infinite Green Energy proposal at Arrowsmith near Perth. (IPO tipped for second half 2023).

-$87m Yuri Australian renewable hydrogen project in the Pilbara – Australia’s largest electroliser (with Mitsui, scheduled for completion in 2024).

-$100bn 50GW Western Green Energy Hub by InterContinental Energy (Final Investment date of 2028).

-Fortescue Future Industries holds land for a large renewable energy hub in Ashburton North.

-South Korea’s Posco (linking with Gina Rinehardt) has also secured land in the Boodarie SIA for its proposed hot briquetted iron (HBI) plant, which would use hydrogen to transform iron ore in direct reduced iron. Posco has pledged $40bn to Australian green hydrogen projects by 2040.

-Alinta Energy is also considering green hydrogen production after being awarded land in the Boodarie area.


-$14.8bn Central Queensland Renewable Hydrogen Project (FEED in early 2023. Completion scheduled for 2027).

-$4.7bn H2-Hub at Yarwun near Gladstone in Queensland, developed by The Hydrogen Utility (FID expected June 2023 for construction commencement in 2025).

-10GW North Queensland Super Hub near Gladstone owned by Windlab, in which FFI’s Squadron Energy, is a part owner.

-Up to $913m Gladstone electrolyser factory (first $116m stage is due for completion in 2023).

-$1bn green hydrogen equipment facility (Global Green Energy Manufacturing centre), including electrolysers (see above) solar photovoltaic cells, long-range electric cabling and wind turbines, at Aldoga, west of Gladstone (part of the hydrogen hub).

-Townsville Hydrogen Hub.

-All up more than 30 hydrogen projects are planned across Queensland.


-$3.5bn Project NEO in NSW (A decision was expected in the December quarter 2022).

-Hunter Hydrogen Hub

South Australia:

-$2bn Spencer Gulf hydrogen complex

-$593m Eyre Peninsula Gateway project in South Australia near Whyalla (this is being fast-tracked for completion in December 2025). As part of this the State plans to build Australia’s first 200MW green hydrogen power plant.

-1.25GW Hydrogen Park South Australia owned by BHP, Fortescue, Woodside, Anglo American, Macquarie Capital, Origin, Jemea Stanwell and Pacific Hydro, and Countrywide, Austrom and Hydrogen Renewables Australia.

-Plans to produce Australia’s first 200MW green hydrogen plant.

Northern Territory:

-$35bn Sun Cable project in Northern Territory (FID previously slated for 2024 prior to voluntary administration).

-Darwin H2Hub. It’s early days yet. Private dollar value commitments are thin on the ground but France’s Total Eren signed an MOU last year to support a 1GW electrolyser facility near Darwin. The government has allocated about $300m to the hub.

-10GW $15bn Desert Bloom Hydrogen project in the Barkly region, whim aims to use atmospheric water capture to produce green hydrogen. Aqua Aerem is the tech company behind the project, which is backed by Osaka Gas. (Under development: Stage 1 works were scheduled for 2022, and completion was set for 2023).

-Provaris energy’s Tiwi Islands green hydrogen export facility.


-$1.7bn hydrogen and methanol production facility by Iberdrola and Abel Energy (FID mid-2024).

-$464m Renewable energy regional program with a Green Hydrogen Hub mooted for Bell Bay. ($70m Australian Government Grant Deed is under way).

-Southern Tasmania Green Hydrogen Project in Brighton, north of Hobart – an electrolyser project led by ReNu Energy ((RNE)) and Countrywide Renewable Hydrogen (due to be online December quarter 2023).


-$100m Geelong Hydrogen Hub (an MOU has been signed with Fortescue Future Industries).

-The Melbourne Hydrogen Hub – relatively small in the overall scheme of things to supply hydrogen buses for the Victorian transit system.

Victoria has some green hydrogen projects but its larger projects appear to be focused on blue hydrogen through its Carbon Net program. 

The world’s first pilot shipment of liquefied hydrogen (derived from brown coal or lignite) out of Victoria arrived in the Port of Kobe, on February 25, 2022, and was deemed to be successful by the companies involved. Further independent research and trials are pending.

ASX Majors Examining Their Options

We have listed the main green hydrogen pledges of ASX-listed majors, emphasising the majority of investment is yet to come.

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