Queensland government pulls plug on vital hydrogen project funding but SA steaming ahead

Another major blow to the nation’s fledgling hydrogen industry is sparking calls for SA to rethink its $593m plan.

Energy Minister Tom Koutsantonis is pushing ahead with SA’s hydrogen plan. Picture: Kelly Barnes

The State Government remains wedded to its long-spruiked hydrogen power plant despite a new blow to the fledgling industry as Queensland leaders pull funding from a massive $12.5bn project in Gladstone.

While the state Opposition is again calling for greater transparency around whether the SA government’s $593m plan faces costly blowouts, Mr Koutantonis’s spokesperson insisted the local plan was on track.

“It remains the case that the government is strongly committed to a Hydrogen Jobs Plan that maximises the opportunity to transition to green iron and steel at Whyalla,” he said.

Queensland’s Liberal National Treasurer David Janetzki has rejected a $1bn funding request to progress the Gladstone hydrogen plant and pipeline sparking concerns the project will collapse.

Steelmaking resumed at the Whyalla Steelworks after an unexpected delay shut it down in March, the steelworks is the key customer linked to the state’s hydrogen plant project. Picture: Supplied

A major player has already exited the consortium with state-owned Stanwell Corporation in November citing rising costs, the announcement following companies Woodside Energy and Origin shelving hydrogen plans and Andrew Forrest-led Fortescue pulling back from its projects across the country.

The SA project faces its own challenges with its key customer GFG Alliance facing production challenges at its Whyalla steelworks, with Premier Peter Malinauskas saying “a lot of work is going on behind the scenes” since issues arose late last year.

“I want to be honest about the fact that we see challenges around the operation of the steelworks and this is something that’s top of mind,” he said.

Opposition energy spokesman Stephen Patterson called for greater transparency about the hydrogen plan saying it was a “huge gamble with taxpayers’ money” in light of national cost blowouts and hydrogen projects being shelved.

No new costings have been released since the project was announced with the Energy Minister’s spokesperson saying “as previously stated, the state government remains in a procurement process and cannot comment on current costs while that process is underway”.

When asked if the Liberal Party would cancel the project if elected, Mr Patterson replied that “nothing is off the table”.

Opposition energy spokesman Stephen Patterson claimed the Premier was “hellbent on pushing” the project through regardless of the cost. Picture: Instagram / State Government

“With the private sector and governments pulling out of green hydrogen, this rings huge alarm bells, however, Peter Malinauskas appears hellbent on pushing this project through regardless of the cost to South Australian taxpayers,” Mr Patterson said.

He claimed the Malinauskas government’s flagship hydrogen plant costing document from 2021 “has been shown to be based on flawed assumptions and the reality is the hydrogen plant could cost up to $1 billion, with significant delays in its delivery”.

“Governments and the private sector around Australia, and the world, are withdrawing from their green hydrogen projects due to massive cost increases and technological hurdles to overcome.”

Last year, the Office of Hydrogen Power chief executive Sam Crafter said no modelling was completed on how the plant would bring electricity bills down for households and small businesses when it starts operation in 2026.

The news emerged as the project was put under the magnifying glass in the government’s Budget and Finance committee meeting.

Originally published as Queensland government pulls plug on vital hydrogen project funding but SA steaming ahead