Japan and Korea underpin six Australian hydrogen projects

Shortlist and context

Japanese and South Korean investors are central to six projects shortlisted for $2 billion under the federal Hydrogen Headstart program; Andrew Forrest’s Fortescue Metals Group did not make the cut. The shortlist was drawn from about 60 applicants and underscores the importance of North Asian customers to Australia’s clean energy export strategy.

Notable projects

Shortlisted projects include Korea Electric Power Co’s Newcastle project; Stanwell Corporation’s central Queensland scheme, with Iwatani, Kansai Electric and Marubeni as foundation customers; BP’s ammonia and sustainable aviation fuel project at Kwinana; a Porsche‑backed $1 billion green fuels project in Tasmania; and the Murchison project in Western Australia, funded by Copenhagen Infrastructure Partners and supported by two Australian superannuation funds, which is targeting about 2 million tonnes a year of green ammonia for export.

Program structure and timeline

Hydrogen Headstart will fund “at least two flagship projects” and is structured as a production credit over 10 years to cover the gap between production cost and sale price rather than as a grant. Shortlisted proponents must lodge final bids by late June, with two or three winners to be selected later in 2024.

Sector outlook and reactions

Australia’s major projects list records 76 hydrogen projects, of which only three reached financial close this year. None of the six shortlisted projects focus on pure hydrogen due to transportation and cost challenges. Copenhagen Infrastructure Partners and ARENA said the program supports investor confidence and fast‑tracking the industry, while Hazer called for the scheme to be extended to technology ventures that convert natural gas to hydrogen.