Trafigura has scrapped its AUD $750m ($472m) plans to develop a green hydrogen facility at Port Pirie, Australia, adding to the growing list of shelved hydrogen initiatives across the country.
The 440MW project announced in 2021 was planned for Trafigura’s metals subsidiary Nyrstar Port Pirie smelter in South Australia. The first stage of the project would have introduced an 85MW electrolyser plant before it was scaled up to 440MW.
Both the government and Trafigura had reportedly committed AUD $2.5m ($1.6m) each towards the project’s design. The initiative would have produced green ammonia for export.
However, the project has now been shelved, reportedly never advancing beyond the front-end engineering and design (FEED) phase, and was not included in the Peter Malinauskas Labor government’s hydrogen plans.
This is despite the previous Premier of the South Australian government, Steven Marshall, claiming projects like Trafigura’s will help the region “achieve net 500% renewable energy compared to current grid demand by 2050” in 2021.
The announcement adds to a growing list of hydrogen initiatives shelved across Australia.
Last week, Iwatani Corporation reportedly withdrew from the 2.88GW CQ-H2 green hydrogen project in Queensland, Australia, shortly after the local government pulled support for the project.
The South Australian government also decided to relocate AUD $600m ($374m) originally set aside for a green hydrogen project in Whyalla to the local steelworks last month.
Malinauskas claimed, “There’s no point in producing hydrogen if there’s not a customer for it.”
Speaking to Climate Impact Corporation (CIC) co-founder David Green, he noted that many hydrogen projects in Australia have been overly reliant on government support instead of prioritising “cost optimisation.”
“Governments should only provide subsidies to projects that have maximised efficiency – otherwise, subsidies merely reward inefficiency,” he told H2 View.
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.
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