Green hydrogen is often heralded as a cornerstone of Australia’s net zero ambitions, but this paper posits the reality is that it is not viable today and won’t be in the foreseeable future. The paper examines the reasons green hydrogen will likely remain prohibitively expensive, why projects are stalling and how the recently announced Orica subsidy exposes Australia’s strategy as untenable. 

The research finds no credible pathway to cost competitiveness without massive and ongoing public subsidies. Yet Australia’s net zero strategy remains heavily dependent on green hydrogen. The paper cites the recent Orica subsidy to illustrate the problem. 

The report concludes that Australia’s hydrogen strategy amounts to an enormous wager on future technology and dramatic energy cost reductions. 

Key findings

• Since 2024, more than 25 gigawatts of green hydrogen projects have been cancelled globally, representing an estimated $95 billion in project value.
• Higher costs are driven by unavoidable energy losses, high capital requirements and the intermittency of renewable power. 
• The paper estimates that making green hydrogen competitive would require subsidies of approximately $8 per kilogram. Nationally, this would amount to tens of billions of dollars. 
• Official government projections indicate that more than 20% of planned emissions reductions rely on hydrogen deployment, both for industrial decarbonisation and for electricity grid stability.