In last week’s federal budget, the Australian Government withdrew AUD $75m ($47m) allocated to the Hydrogen Highways scheme.
Launched in 2022, the initiative was designed to decarbonise the heavy transport sector by adopting hydrogen-powered fuel cell vehicles and refuelling infrastructure along key freight routes.
Ahead of this year’s federal election, the Labor Government has reportedly reallocated funding from the Hydrogen Highways programme to support other transport decarbonisation priorities.
Since its launch in 2022, the programme has committed funding to Line Hydrogen’s AUD $5.5 million ($3.5m) development in Georgetown, Tasmania – but, according to reports, no other projects have received support to date.
A joint venture project between the New South Wales and Victorian governments to build charging infrastructure along the Hume Highway was also earmarked for support, but it was ultimately abandoned.
On behalf of Climate Change and Energy Minister, Chris Bowen, a spokesperson said, “We have made historic investments in hydrogen as part of a Future Made in Australia.
“As part of that, we’re reallocating funding from the Hydrogen Highways programme for other priorities to accelerate decarbonisation in the transport sector.”
However, the spokesperson declined to confirm whether the programme will be completely shut down after the reallocation.
Australia’s hydrogen sector has had its setbacks – but it’s not alone. Globally, hydrogen-powered heavy-duty transport has stalled after early momentum.
Despite a 36% jump in fuel cell truck deployments in 2024, the Hydrogen Council reported that of the 90,000 FCEVs on the road, China accounts for 95% of the hydrogen truck market.
Analysis: Billions pledged, projects paused – what’s next for Australia’s hydrogen industry?
Australia’s hydrogen sector has encountered significant challenges over the past year, highlighted by the South Australian Government’s recent decision to reallocate funding from the Whyalla hydrogen project to support local steelworks.
It came as the fourth project, with federal or state support, to be in the spotlight for apparent failures, opening the Labor government to stark, anti-hydrogen political opposition – just months away from a federal election.
bp’s 105MW Kwinana project, Origin Energy’s Hunter Valley Hydrogen Hub and Stanwell Corporation’s Central Queensland Hydrogen Project (CQ-H2) were all selected for a share of AUD $2bn Hydrogen Headstart Program.
The funding scheme planned to provide the prospective hydrogen producers with a 10-year production credit, aimed at closing the gap between high production costs and sale prices.
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