ARENA shortlists renewable hydrogen projects

The Australian Renewable Energy Agency (ARENA) has announced the shortlisted projects for Round 2 of the Hydrogen Headstart Program. ARENA says the projects selected to progress to the next stage in the application process are some of the most advanced large-scale renewable hydrogen proposals in the country, spanning multiple states and a range of end uses, including ammonia and alternative fuels.

The Australian Government has revised the amount of funding allocated to the program in the 2026 federal Budget to $1 billion, and ARENA will now invite shortlisted projects to submit full applications. The full application phase includes a rigorous assessment process and detailed due diligence. Applicants must satisfy program criteria, with only those that meet a high merit threshold being considered for funding.

ARENA CEO Darren Miller said the level of engagement in Round 2 of Hydrogen Headstart demonstrates that industry remains committed to building a renewable hydrogen sector in Australia.

“Renewable hydrogen presents Australia with a significant economic and decarbonisation opportunity. Its potential to develop low-emission fuels for aviation and shipping, as well as key inputs for fertiliser, could also help improve the nation’s energy resilience in the longer term,” he said. “Renewable hydrogen is a complex, capital-intensive industry and progress takes time, but it is a critical enabler of industrial decarbonisation, particularly for hard-to-abate sectors. What we’re seeing are expressions of interest that are considered and well aligned to future market demand.”

The shortlisted applicants are:

• Bell Bay Powerfuels (Tas): 300 MW electrolysis facility to produce methanol.
• European Energy Australia (Qld): 150 MW electrolysis facility for methanol production.
• HAMR Energy (Vic): 220 MW electrolysis facility for methanol and SAF.
• HIF Asia Pacific (Tas): 140 MW electrolysis facility to produce methanol.
• Murchison Hydrogen Renewables (WA): 500 MW facility to produce ammonia.
• Perdaman Commercial Developments (WA): 750 MW facility to produce urea.
• Summit Hydro (Qld): 120 MW facility for alumina production.
   

Announced in the 2023–24 Budget, the Hydrogen Headstart Program aims to catalyse Australia’s hydrogen industry to take advantage of the country’s opportunity to be a global hydrogen leader.

Round 2 of Hydrogen Headstart builds on ARENA’s existing support of renewable hydrogen, with the Agency having already committed more than $1.2 billion to two projects in Round 1, and over $396 million to 68 renewable hydrogen projects since 2017 through other funding programs.

Under the Program, projects seeking to produce renewable hydrogen, or derivatives, can apply for a production credit delivered over 10 years to bridge the commercial gap between the cost of producing renewable hydrogen and market prices.

Image: Project Ceres urea plant under construction in WA. Credit: Perdaman Chemicals and Fertilisers