Stanwell Corporation, the Queensland state-owned power generator, has officially withdrawn from the proposed 2.9 GW Central Queensland Hydrogen Project (CQ-H2), marking a significant setback for Australia's ambitious green hydrogen export strategy. The decision, confirmed on June 30, 2025, follows an extensive re-evaluation of the project's commercial viability and a strategic pivot by the Queensland government regarding its investment priorities in the renewable energy sector.

The CQ-H2 project, initially envisioned as a cornerstone of Queensland's hydrogen export hub, aimed to produce up to 800 tonnes per day of green hydrogen via electrolysis, powered by new renewable energy generation. This output was primarily targeted for export to key Asian markets, including Japan and South Korea, positioning Gladstone as a critical node in the emerging global hydrogen supply chain. However, Stanwell's exit underscores the formidable financial and logistical hurdles confronting large-scale green hydrogen initiatives.

“After thorough due diligence and considering the evolving market dynamics, we concluded that the CQ-H2 project, in its current form, did not meet our stringent investment criteria for commercial returns and risk profile,” stated a Stanwell spokesperson. This sentiment was echoed by Queensland’s Energy Minister, who noted, “Our government remains committed to green hydrogen, but our investment strategy must prioritize projects that demonstrate clear pathways to commercialization and deliver tangible benefits to Queenslanders.” The Minister emphasized a shift towards supporting a broader portfolio of renewable energy and storage solutions, rather than concentrating resources on a single megaproject.

Industry analysts suggest that the withdrawal reflects a broader global trend of caution surrounding the economic feasibility of green hydrogen production at scale. High capital expenditure requirements for electrolyzers and associated infrastructure, coupled with the absence of mature off-take markets and fluctuating energy prices, continue to pose significant challenges. “The Stanwell decision is a stark reminder that while the long-term potential of green hydrogen is immense, the immediate investment landscape demands robust commercial frameworks and de-risked pathways,” commented Dr. Emily Chen, a senior energy economist at the Australian Energy Institute. She added that similar large-scale projects globally are facing intensified scrutiny over their financial models and reliance on public subsidies.

This development will likely prompt a re-assessment of Queensland’s energy strategy and its role in the global hydrogen race. While smaller, domestic green hydrogen applications, such as for industrial decarbonization or heavy transport, may still attract investment, the immediate future of multi-gigawatt export-oriented projects in the region appears uncertain without substantial, long-term policy and financial de-risking mechanisms from both state and federal governments.