Central Queensland Hydrogen Project axed after request for extra $1bn in govt funding

A $12.5bn central Queensland green hydrogen project has been axed by the state government, meaning the proposed $8.9bn returns to the region’s economy and $14.5bn in exports will not flow.

A $12.5bn green hydrogen project at Gladstone that would have been Australia’s largest has been axed by the state government.

Taxpayer funding to progress the Central Queensland Hydrogen Project (CQ-H2) was pulled by Treasurer David Janetzki following a request from government-owned energy corporation Stanwell for $1bn to continue the project.

“The Queensland Government will not be committing the substantial equity and grant

funding requested for Stanwell Corporation to progress the CQ-H2 project,” he said.

“It would have required significantly more than $1 billion in state government funding, including infrastructure for water, port, transmission and hydrogen production.

“We are focused on our energy generators providing affordable, reliable and sustainable power for Queenslanders.

“Stanwell’s investment in renewable hydrogen does not align with these expectations and this government’s objectives to focus on core financial and operational performance, and to maximise value from existing generation assets for Queenslanders.”

CQ-H2 was slated to produce up to 200 tonnes of hydrogen by 2028 and 1000 tonnes by 2031.

Queensland Treasurer David Janetzki. Picture: Supplied

It was expected to add $8.9bn to the central Queensland economy and deliver $14.5bn in exports.

The former Labor state government championed the CQ-H2 project, which was being developed by a consortium featuring Japan’s Iwatani and Marubeni corporations, Singapore’s Keppel Ltd’s Infrastructure Division and Queensland’s energy company Stanwell.

Japanese utility Kansai Electric Power Company walked away from the project last year citing higher than expected costs.

The government has also axed the Pioneer-Burdekin Pumped Hydro project, it said would cost $36bn, and the future of the 2000MW Borumba project on the Sunshine Coast remains under a cloud.

Mr Janetzki said he was working on options to “save” the Borumba project.

Under Labor, Borumba’s cost blew out from $14 billion to $18 billion, with just a 1 per

cent chance it would be providing energy by 2030.

The government said proponents of green hydrogen were scaling back funding support, noting Fortescue Metals last year cut 700 jobs and scaled back its hydrogen ambitions.

Originally published as Central Queensland Hydrogen Project axed after request for extra $1bn in govt funding