Australia’s aspirations for renewable energy were dealt a blow on Tuesday when a state government withdrew its support for a significant “green” hydrogen project, leaving it in limbo.
The project’s goal is to construct a hydrogen manufacturing facility in the state of central Queensland, which would generate low-emission fuel for countries like Singapore and Japan.
Despite the Australian government’s US$40 million building committment, state officials withdrew their backing on Monday night due of the rapidly rising costs.
Climate Change Minister Chris Bowen said Tuesday it was “surprising and disappointing”. “Green hydrogen plays to Australia’s unique strengths and we’re unapologetic about pursuing an industry that is recognised as having an important role in the future of manufacturing and energy in Australia, and globally,” he said in a statement.
It was unclear whether the hydrogen hub could go ahead without state government support.
A “commercial decision for the parties involved” is what Bowen described as the outcome.
Singapore-based asset manager Keppel is mentioned as a partner, along with Iwatani Corporation and Marubeni Corporation of Japan.
According to a Queensland state official, hundreds of millions of US dollars would have been needed for new shipping facilities and infrastructure.
Seven “hydrogen hubs” are to be constructed nationwide, according to the Australian government.
Powered by solar panels and wind turbines, these hubs would split water into hydrogen and oxygen through a process called electrolysis.
The so-called “green” hydrogen would then be liquefied and shipped overseas where heavy industries such as steel manufacturing could use it as an environmentally friendly fuel.
Japan, Germany, Singapore and others are hungry for reliable hydrogen fuel supplies.
Green hydrogen generation has been beset by technological issues and the exorbitant expense of custom infrastructure, despite its potential.
In October, Origin Energy, an Australian utility, withdrew from a planned hydrogen plant, citing the worldwide market as “developing more slowly than anticipated.”
Months ago, mining tycoon Andrew Forrest put similar plans on hold.
“Several projects have been cancelled due to uncertainty about demand or regulations, financial hurdles, licencing and permitting issues,” the International Energy Agency reported last year.
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