Future of Australia's flagship green hydrogen project in doubt after ruling

Author: Richard Ewing

2021/06/21

LONDON (ICIS)--The Australian government has rejected plans for the world’s largest green hydrogen and ammonia production facility amid grave concerns about the impact of the showcase project on protected wetlands and wildlife.

In a surprise move, Environment Minister Sussan Ley ruled that the Asian Renewable Energy Hub (AREH) “will have clearly unacceptable impacts" on precious flora and fauna in the remote Pilbara region of Western Australia.

Despite being awarded "Major Project Status" by the federal government in late 2020, the future of the multi-billion dollar scheme is now in doubt, with the various international companies involved in the proposals yet to respond.

The AREH includes 26GW of wind and solar generation, at least 3GW of generation capacity for Pilbara energy users and up to 23GW of generation for the production of green hydrogen and ammonia.

In a short statement, industry body the Clean Energy Council said the AREH "is a transformative economic opportunity for Australia, making a significant contribution to local and global decarbonisation efforts".

"It is the Clean Energy Council’s understanding that the Federal Minister for the Environment has rejected the expanded proposal for this project prior to the completion of detailed environmental studies.

"The Clean Energy Council is seeking urgent clarification from the Federal Minister for the Environment to address the perception that this decision is inconsistent with well-established processes or with the treatment of non-renewable projects.

"We expect that the Commonwealth will work in partnership with the AREH to provide the necessary guidance to appropriately assess and address any environmental impacts under the Environment Protection and Biodiversity Conservation Act."

In a brief notice dated 15 June, Minister Ley rejected the proposals due to the likely impact on the "Ramsar wetlands and listed migratory species".

With a final investment decision pencilled in for 2025, the AREH was expected to support more than 20,000 direct and indirect jobs during construction and 3,000 jobs once fully operational.

Australia is seeking to become a global leader in the production of zero-carbon energy, with federal officials committing more than A$570m ($428m) to back the development of an export-oriented hydrogen industry.

($1 = A$1.33)