The expectation for the hydrogen project, known as CQ-H2, was that it could deliver an initial 200 tonnes of hydrogen a day, rising to 800 tonnes by 2031.

However, it has only moved into what is known as the front-end engineering design (FEED), a crucial step in developing a project that normally follows feasibility studies.

That study was released on the project last year which said the total costs of the project could reach $10 billion (in 2022 dollars). Gladstone is considered a good prospect for a hydrogen hub because of its existing LNG infrastructure and an industry hungry for renewable energy.

Estimates suggested that it could deliver $17 billion in exports over its 30-year life and the feasibility study found it was technically feasible, but only commercially viable with Government support because the cost of the hydrogen was still too high.

However, in the recent Federal Budget, the Albanese Government pledged $2 billion to underwrite hydrogen projects.

Associated with the CQ-H2 hydrogen project was a second announcement that Incitec Pivot and Singapore infrastructure company Keppel were investigating the development of a green ammonia project in Gladstone. Ammonia can store hydrogen allowing it to be transported safely and more efficiently and is widely regarded as a viable option and Incitec is a major producer of ammonia.

The Australian Renewable Energy Agency would contribute $20 million to the FEED and the State Government would spend a further $15 million. The rest could come from the Government owned Stanwell Corporation and the Asian consortium partners Japan’s Iwatani, Marubeni and Kansai as well as Singapore’s Keppel.

Federal Energy and Climate Change Minister Chris Bowen said projects like CQ-H2 were critical to scaling up the green energy industry.

“The Government is committed to making Australia a global hydrogen leader and projects like CQ-H2 could lead the way in exporting renewable hydrogen to the international market,” he said.

“Japan, Korea and China are three of our largest trading partners and have all made clear commitments to increase the use of hydrogen with a focus on establishing international supply chains for imports.”

Premier Annastacia Palaszczuk said CQ-H2 was the largest hydrogen investment in Australian history and State Renewables and Energy Minister Mick de Brenni said green hydrogen was the next resource frontier.

“We are writing a new chapter and carving out our own path to ensure Queensland’s mighty sun, wind and water are leveraged to help decarbonise our nation and the world,” he said.

The second part of the announcement, the deal between Incitec and Keppel, would mean a further investigation of infrastructure, licensing and approvals.