International consortium pulls out of $12.5b Qld hydrogen project at Gladstone

Australia’s largest green hydrogen project is officially over with the collapse of the inter­national consortium developing the $12.5bn plant and pipeline in Queensland.

Australia’s largest green hydrogen project is officially dead with the collapse of the inter­national consortium developing the $12.5bn plant and pipeline in Gladstone.

The scrapping of the Central Queensland Hydrogen Project (CQ-H2) follows the lack of progress in a near-$100bn pipeline of ambitious proposals in the green hydrogen sector being championed by Anthony Albanese as a future export industry to meet net-zero emissions targets, the Australian reported.

Queensland’s state-owned Stanwell Corporation, the lead developer of the Gladstone site, has confirmed it has ended all involvement in the project, which was promoted by former Labor premiers Annastacia Palaszczuk and Steven Miles.

“Stanwell has discontinued its involvement in the Central Queensland Hydrogen Project (CQ-H2) project and other ­hydrogen development activities,’’ the company said after being contacted by The Australian about rumours the project had been cancelled.

Annastacia Palaszczuk and Steven Miles spruiked the biggest hydrogen electrolyser plant to be built in Gladstone – Photo William Debois

“The CQ-H2 project has been a valuable international collaboration that has provided important technical and commercial knowledge to support the future large-scale commercialisation of renewable hydrogen.”

The Gladstone project was initially touted as being able to produce up to 200 tonnes of liquefied hydrogen by 2028, and four times that by 2031.

Its collapse follows a decision in February of the Liberal National Party state government to reject a request by Stanwell for $1.6bn in funding for the next stage of the project.

The Japanese utility Kansai Electric Power Company, which was to be one of Gladstone’s ­anchor customers, pulled out of the consortium in November.

The now scrapped Central Queensland Hydrogen Project.

Sources told The Australian that Stanwell had unsuccessfully attempted to find a new “funding partner” after Treasurer and Energy Minister, David Janetzki refused the request for funding from Stanwell.

Another of the Japanese consortium members, Iwatani Corporation, withdrew from the project and closed its Queensland offices in March, without making a public announcement.

The 2019 initial $12.5bn estimated cost of the project’s construction had blown out to $14.75bn by 2022, and there was further expected blowouts with the worldwide hike in input costs.

Central Queensland-based Senator Matt Canavan, along with others, has long questioned the Albanese government spending billions on green energy projects.

In a recent column in this publication, Senator Canavan said Australia should be putting billions more into defence, given the current global situation, rather than chasing net zero projects which were going nowhere.

“We currently spend $55bn a year on defence. The Australian government plans to increase spending to 2.3 per cent of GDP over the next 10 years,’’ he wrote.

“This is well short of the defence spending targets of the UK (3 per cent), Germany (3.5 per cent) and France (3 to 3.5 per cent). To lift our defence spending to the planned 2.3 per cent of GDP we have to increase spending by almost $10bn per year.

“To lift our defence spending to the target requested by the US would require a $40bn increase.

“Finding another $30bn a year would be difficult but not impossible alongside some of our other questionable spending priorities.

“ Last week research from the Institute of Public Affairs showed that the Australian Government now spends $9bn on various green energy schemes that we do not have a lot to show for.

“Why would we spend billions on a net-zero target that almost no other country takes seriously over the defence of our country?”

Originally published as International consortium pulls out of $12.5b Qld hydrogen project at Gladstone