Critical $470 million project suddenly halted with no reason provided: 'The decision was taken not to proceed further'

The Australian government was all set to build a hydrogen plant in South Australia with Geneva-based company Trafigura, but it will not move forward with the project. 

What's happening?

According to Reuters, a Trafigura spokesperson announced on March 25 that the company had abandoned the $471.2 million "green hydrogen plant at its Port Pirie," with no explanation given. The Australian government has not commented so far. 

Trafigura originally announced the plant in 2021 to lower its polluting gases. It completed a $3 million feasibility study for the green hydrogen plant in 2023.

A Trafigura spokesperson told Reuters, "Following completion of the study, the decision was taken not to proceed further."

The company even established a fund to invest in renewable energy in 2019, so the fact that it is not moving forward with a previously announced project is confusing.

Why is green hydrogen important?

According to Reuters, green hydrogen is considered a renewable replacement for dirty energy. It is "produced by splitting water molecules with a current of renewable electricity in electrolysers."

The World Economic Forum said, "Green hydrogen can contribute to energy security by providing a way to store and transport energy and diversify energy sources."

While solar and wind rely on the sun and wind, hydrogen can be used when those sources are unavailable. It can also be used in industries that are hard to electrify, such as large-scale machinery and long-distance transport.

Additionally, green hydrogen is believed to be a vital tool in protecting the planet. 

What's being done to get more green hydrogen projects approved?

While green hydrogen would be an excellent renewable energy source, according to Economist Impact, there is limited existing infrastructure. That makes the process of building projects complex and expensive. 

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The think tank noted, "As electrolyser technology is deployed at scale, costs fall and the likelihood of technology breakthroughs increases."

Economist Impact said that "ammonia production plants and oil refineries" are a logical first step because infrastructure exists and the companies that produce hydrogen can also use it. 

Governments can also provide incentives for producing green hydrogen. You can use your voice by speaking with your representatives to get incentives passed. 

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