The Australian Government has allocated AUD $750m ($473m) to back the nation’s green metals transition, including hydrogen-based iron production.
Part of the AUD $1.7bn Future Made in Australia (FMIA) Innovation Fund , the government will provide grants to support the development of new technologies, pilot and demonstration projects, and revitalising plant and equipment.
Up to AUD $500m ($313m) has already been awarded through FMIA for clean energy technology manufacturing, while AUD $250m ($158m) has gone towards low-carbon liquid fuels. AUD $200m ($126m) is yet to be allocated.
“Jobs up and emissions down, that’s our goal and investing in our world-class Australian made metals know-how is helping make that happen,” explained Ed Husic, Minister for Industry and Science.
“Demand for green metals is expected to account for a third of the global metals market in coming years, this is an opportunity we cannot afford to miss.”
Reportedly, Australia’s metals exports are worth over $150bn annually, and the additional funding is hoped to add to this. Funding will be administered independently through the Australian Renewable Energy Agency (ARENA).
Prime Minister Anthony Albanese said, “We want to see more Australian workers make more things here.
“That’s why we are allocating funding to back our local metals manufacturers to seize the opportunities of the future.
“We’ve got the resources, the workers, and the know-how; the only thing we don’t have is time to waste.”
The Australian Hydrogen Council (AHC) has welcomed the decision made by the government.
Dr. Fiona Simon, commented, “Funding certainty is critical for unlocking private investment, adding value and supporting decarbonisation of existing Australian industries such as the $150bn metal exports industry. This is also reflected in the priorities set out in the National Hydrogen Strategy
“It is positive to see the Australian Government recognise these opportunities and the need to back Australian industry and innovation in a globally competitive market, while also strengthening sovereign capability and harnessing our comparative advantages amidst higher trade policy uncertainty.”
However, despite this momentum, the Australian hydrogen industry has encountered setbacks in 2025.
Whyalla Steelworks © GFG Alliance
Last month, the South Australian Government redirected funding away from a green hydrogen project in Whyalla, originally intended to power the local steelworks.
The decision followed GFG Alliance’s delay in committing to offtake the produced hydrogen, leading the government to instead invest the funds directly into the steelworks.
South Australian Premier Peter Malinauskas defended the move, stating there is “no point in producing hydrogen if there’s not a customer for it,” underscoring the ongoing challenge of securing commercial demand for hydrogen projects.
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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