Article by Senator the Hon Matthew Canavan, courtesy of The Courier Mail
27.06.2025
The Queensland Budget this week revealed that the former Labor government wasted a rainy-day fund on various renewable and hydrogen pet projects.
When the Labor party increased coal royalties a few years ago, it knew that Queensland would lose part of the windfall revenue to other states as part of the GST redistribution. It put away a $2.5bn sinking fund to cover these transfers.
However, in May last year the Queensland government put about half of these funds into the Renewable Energy and Hydrogen Jobs Fund. Then in last year’s budget it allocated the remaining funds as part of the Queensland Energy and Jobs Plan.
This has left Queensland without the money to cover the expected GST transfers to other states. It’s a shocking mismanagement of our state’s finances.
What is worse though is that much of the funding has been wasted on hydrogen projects that just a year later have been shown to be a failure.
Over the past two years 8 major Australian hydrogen projects have been scrapped. Last week I travelled with the local Federal MP, Colin Boyce, to one of them just west of Gladstone.
Just a few months ago around 90 people worked at Fortescue’s hydrogen facility at Aldoga. Now just a few workers still have their jobs.
State and federal Labor governments had announced $90m of taxpayer funding for this project. And, the place looks amazing.
There are new roads. There are huge transmission towers with cables extending over mountain ranges. And there are enormous water tanks connected by a pipeline that snakes its way over 100km north to Rockhampton.
There is a massive new white shed with a green “0” emblazoned on the side. Presumably, meant to represent net zero it now sits as a stark advertisement for the approximate number of hydrogen jobs that we will have in Australia anytime soon.
Almost all of this infrastructure is now stranded. Australian taxpayers have spent millions and all we have got for it so far is a shed, roads to nowhere and transmission towers that are not useful for much more than hanging clothes on.
The only thing larger than the massive transmission towers at the site is the colossal waste of taxpayer money that all of this involved. The $90m that governments had provided to Fortescue is just the start.
We are not exactly sure how much was spent on those transmission towers which were built by a state government-owned Powerlink. Those towers send cables out to a massive solar factory also funded by taxpayer money. They are now not needed and are a complete waste of money.
The water pipeline that was built from Rockhampton to Gladstone cost $1bn and was partly funded by coal royalties. As the then Labor treasurer, Cameron Dick, said at the time “The Palaszczuk government’s contribution towards this vital infrastructure for Central Queensland is the first investment from our new progressive coal royalty tiers.”
Those increased coal royalties are now threatening coal jobs but they will not deliver any of the hydrogen jobs that were promised.
Work on the pipeline seems to be continuing. Colin and I saw cranes and workers completing the water tanks at the end of the route. Hopefully, the water can be repurposed to help expand Gladstone industry. That would be a better use than burning Australia’s scarce freshwater reserves and sending the hydrogen molecules to North Asia.
Who thought it would be a good idea to export fresh water from the driest continent on earth?
Thankfully due to the high costs of making hydrogen, Central Queensland can keep its freshwater resources. A few weeks ago, a major developer of hydrogen projects in Australia, InterContinental Energy, revealed that its hydrogen is costing at least $8 per kilogram to make. As energy expert Saul Kavonic said “$8-11 a kg equates to over $60 a gigajoule, which no major energy user can afford”. Natural gas prices in Australia are a quarter of these costs.
So much for Australia becoming a green energy export superpower. If you think that state Labor’s waste on hydrogen is huge wait until you hear about the Federal Labor party.
Anthony Albanese has allocated at least $9bn for hydrogen projects, including part funding for the failed Fortescue project in Gladstone.
Hydrogen is just not ready for prime time. We can not afford to continue to waste money on dreams that are not going to achieve reality. We should stop providing scarce public funds for the latest climate fads of rich investors.
Matt Canavan is an LNP senator for Queensland.
