Article by Angela Macdonald-Smith, courtesy of Financial Review.
24.07.2025
BP has abandoned plans to invest in a huge green hydrogen project in Western Australia, adding to the companies walking away from the clean fuel that was once regarded as a big export opportunity for the country.
The British energy major, which has recently dialled back its green energy plans in favour of increasing investments in its core oil and gas activities, said it had informed its partners in the Australian Renewable Energy Hub in the Pilbara of its decision to exit.
The mega project, which BP bought into in 2022 for an undisclosed price, was estimated by developer CWP in late 2020 to cost about $US36 billion ($54.4 billion).
InterContinental Energy is also a partner in the proposed project, which had suffered a setback in 2021 after initial plans were blocked by the Morrison government on environmental grounds.
“This decision reflects BP’s recent strategy reset, which will see BP grow its upstream oil and gas business, focus its downstream business, and invest with increasing discipline into the transition,” a BP Australia spokeswoman said.
She said that although the project no longer aligned with BP’s strategy, “it continues to present an important opportunity for Western Australia to decarbonise the Pilbara”.
Most of Australia’s iron ore is mined in the Pilbara, which is often described as the country’s economic engine room.
The Australian Renewable Energy Hub involves the proposed development of huge onshore wind and solar power generation to produce renewable energy for the mining industry in the Pilbara. It also involves plans to produce green hydrogen for customers in WA and overseas.
BP’s decision is the latest setback for the development of hydrogen in Australia. Companies such as Fortescue and Origin Energy have also ditched plans for such projects.
On Thursday, Fortescue advised of a $US150 million impairment charge it would take against its results after formally abandoning plans for a hydrogen project in Arizona in the United States, and an electrolyser project in Gladstone in Queensland.
On Wednesday, Woodside Energy said it would take a $US140 million charge against first-half profits after abandoning a major hydrogen project in the US.
Some projects for the fuel are still inching forward, with federal funds earmarked for the Murchison venture in Western Australia’s midwest and for an Orica project in the Hunter Valley.
The BP spokeswoman said the group would work with its partners in the Australian Renewable Energy Hub on an efficient transition of operatorship of the venture.
BP owns 63.57 per cent of the AREH venture and is the operator; InterContinental Energy owns 26.39 per cent and CWP Global 10.04 per cent.