Queensland Sparks Debate by Dropping $1 Billion Hydrogen Project Funding
Brisbane, Tuesday, 4 February 2025.
Queensland’s withdrawal of over $1 billion from the Central Queensland Hydrogen Project surprised many, sparking federal debates. This could impact nearly 9,000 jobs and $8.9 billion in economic benefits.
The Shocking Announcement
I’ve been following the green hydrogen sector closely, and I must say the Queensland government’s announcement on February 2, 2025, caught many of us off guard. The decision to withdraw support from the Central Queensland Hydrogen Project (CQ-H2) has sent ripples through the industry [1]. This $12.4 billion project near Gladstone [5] was expected to be a game-changer, with potential to generate $8.9 billion for the local economy and create nearly 9,000 jobs [1].
Scale and Impact
The project’s ambitions were truly impressive. I’m particularly struck by the planned scale - it was set to install up to 720 MW of electrolysers initially, with potential to expand to 2.88 GW, capable of producing over 1 million tonnes of green hydrogen annually [5]. The immediate impact is already visible, with more than 140 workers losing their jobs [3]. This comes at a crucial time, as the project was approaching its final investment decision, expected by mid-2025 [5].
Financial Complexities
Let me break down the numbers for you. The federal government had already committed significantly, offering $20 million for front-end engineering design and nearly $69 million through the Hydrogen Hubs program [1]. Interestingly, $14 million has already been disbursed [1]. Queensland Treasurer David Janetzki explained that the state couldn’t meet the substantial funding requirements, which exceeded $1 billion for infrastructure including water, port, and transmission facilities [1].
Federal Response and Future Implications
Federal Energy Minister Chris Bowen’s reaction was notable - expressing both surprise and disappointment [1]. Despite this setback, I find it encouraging that some green hydrogen ventures in Western Australia and Tasmania are pushing ahead with their plans [3]. The project’s fate could influence upcoming parliamentary debates on $6.7 billion in green hydrogen production credits [1], including a proposed tax credit of $2 per kilogram for green hydrogen production [1].