Australia’s bid to become a global hydrogen superpower has been dealt a blow, with the nation’s biggest energy utility pulling out of building a large-scale green hydrogen hub, which had been shortlisted for a share of $2 billion of funding from the Albanese government.
Power and gas giant Origin Energy on Thursday revealed it was walking away from its hydrogen ventures, including its proposed Hunter Valley Hydrogen Hub in Newcastle, one of just six projects to be shortlisted for the “hydrogen head start” scheme unveiled as part of last year’s federal budget.
The push to scale up a green hydrogen industry in Australia has faced setbacks due to the high cost and the vast amount of renewable energy required to split hydrogen from water.Credit: Getty
The Hunter Valley Hydrogen Hub, a joint venture between Origin and ASX-listed fertiliser maker Orica, is among the most-advanced hydrogen developments nationally, and was intended to begin production in 2026.
Green hydrogen – the name for hydrogen made using renewable energy to ensure it is emissions-free – is considered a promising fuel to curb planet-warming emissions due to its ability to displace coal, gas and oil in parts of the economy that are difficult to decarbonise, such as manufacturing or heavy transport. However, it remains prohibitively expensive to make and is not yet viable at scale, with most of today’s hydrogen still made using fossil fuels that release emissions into the atmosphere.
Origin chief executive Frank Calabria said the company had worked hard to evaluate the investment case for green hydrogen, and was grateful to have received strong government support. However, it had become clear that the hydrogen market was “developing more slowly than anticipated”, and would “cease work on all hydrogen development opportunities”.
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“Origin has been closely following the global development of hydrogen technology and markets over the past four years, and we have evaluated a range of options across several jurisdictions,” he said.
“We acknowledge there will be some disappointment at this decision and are grateful for the opportunity to evaluate the feasibility of this project in conjunction with Orica, and with the support of both federal and state governments, local representatives and the community.”
ASX-listed Origin, a diversified energy supplier whose business spans fossil fuels, renewables and battery storage, said the decision to exit hydrogen reflected its decision to prioritise other clean energy opportunities more aligned with its strategic direction.
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