Australia’s ambitious plans to become a global leader in green hydrogen production are facing significant challenges [1] as the country approaches its upcoming elections. According to project ratings agency HySights Pte Ltd, the outlook for Australia’s green hydrogen sector has soured, with the ratings of six key projects dropping an average of two bands since the third quarter of 2024.
The initial A$2 billion ($1.3 billion) program aimed at encouraging the nascent green hydrogen sector has seen setbacks, with none of the selected projects now considered “bankable.” This decline in ratings is attributed to sponsors leaving or pausing their involvement, raising concerns about the viability of these projects.
HySights co-founder Ciaran Roe highlighted the potential impact of a likely change in the ruling party on the country’s green hydrogen initiatives. Four of the projects are export-oriented, which means that changes in government incentive schemes could have wide-ranging effects on low-emission fuel markets in Japan, South Korea, and Singapore.
Under the leadership of Anthony Albanese’s Labor government, Australia has been pushing to harness its abundant wind and solar resources to develop a robust green hydrogen sector. The government has committed over $5 billion in incentives over the next decade to support this industry. However, the opposition coalition, which has gained an edge in recent polls, has shown less enthusiasm for green hydrogen, recently denying A$1 billion of funding for a major project.
Renewable hydrogen remains heavily reliant on government support to be economically competitive. BloombergNEF Analyst Caroline Chua noted that faster implementation and fund allocations are crucial for the local hydrogen industry to take off. Additionally, Queensland’s earlier withdrawal from financial investment raises concerns about the federal administration’s ability to deliver on its hydrogen and clean energy supply chain ambitions.
As Australia heads towards its elections, the future of its green hydrogen sector hangs in the balance. The outcome of the elections will likely determine the trajectory of the country’s renewable energy initiatives and its position as a potential global leader in green hydrogen production.
Sources:
[1]Australia’s Green Hydrogen Outlook Seen Souring Before Elections https://www.energyconnects.com/news/renewables/2025/february/australia-s-green-hydrogen-outlook-seen-souring-before-elections/