“Ultimately, we believe investments focused on renewables and storage can best support the decarbonisation of energy supply and underpin energy security over the near term,” Calabria said.

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The news comes after Andrew “Twiggy” Forrest, the billionaire chairman of mining giant Fortescue, was forced to hit the brakes on the speed and scale of his plans to become a major green hydrogen producer, blaming the high cost and the vast amount of renewable energy required to split hydrogen from water.

Despite putting on hold the company’s ambitious target of producing 15 million tonnes of green hydrogen by 2030, Forrest said Fortescue remained “steadfast” in its commitment to scaling up and commercialising green hydrogen. Fortescue now plans to initially focus on four key green hydrogen projects in Australia, the United States, Norway and Brazil. Further projects in Morocco, Oman, Egypt and Jordan would follow, the company said.

Origin announced plans for a potential hydrogen hub on Kooragang Island in early 2022. It was intended that the hydrogen produced there would progressively displace natural gas as a feedstock in nearby ammonia manufacturing.

Orica chief executive Sanjeev Gandhi said the company was disappointed by Origin’s withdrawal, but respected its decision and was grateful for the progress made in advancing Australia’s hydrogen ambitions.

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“We remain committed to exploring new opportunities in this promising sector,” Gandhi said.

“We remain open to discussions with interested parties who share our vision for a sustainable energy future and Australia’s hydrogen economy”.

Energy Minister Chris Bowen said Origin’s decision was disappointing, but the government remained optimistic about hydrogen, with a project pipeline worth $200 million – one-quarter of which are already operating or under construction.

“Green hydrogen plays to Australia’s unique strengths and remains important to the future of manufacturing and industry both in the Hunter and other regions, as well as globally,” Bowen said.

International partners are also investing in Australia. Bowen cut a $660 million deal with Germany last month, funded equally by the two nations, to guarantee European buyers for Australia’s green hydrogen.

Opposition energy spokesman Ted O’Brien criticised the government for restricting its support to green hydrogen, produced with renewable energy, and argued that funding should also be made available to other technologies.

“Labor’s over-reliance on green hydrogen was always going to be risky, and now that risk is being realised,” O’Brien said.

“⁠If hydrogen is to succeed in Australia, we must be colour blind when it comes to low emissions technologies including blue hydrogen [gas] and pink hydrogen [nuclear].”

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