Fortescue Cancels Flagship Hydrogen Tasks: UK Ought to Take Discover

Fortescue’s current determination to abandon two main hydrogen-for-energy initiatives after reaching Closing Funding Determination (FID) serves as an vital sign for policymakers all over the world, notably within the UK, which is pretending its autumn hydrogen technique replace will probably be proof led. These cancellations, one positioned in Gladstone, Australia, and one other in Arizona, USA, characterize extra than simply remoted setbacks.

They illustrate a broader financial actuality. Hydrogen as an vitality supply, versus its use as an industrial feedstock, is more and more failing underneath scrutiny. Fortescue’s initiatives had important monetary backing, authorities assist, and appeared viable on paper. But the underlying economics merely couldn’t stand up to altering situations.

The Arizona challenge was an 80 MW inexperienced hydrogen facility initially meant to ascertain Fortescue’s foothold within the American market. As I famous a 12 months in the pastconstructing a inexperienced hydrogen challenge in an more and more waterless desert was insane to start with. The challenge’s cancellation adopted shifts in US vitality coverage underneath the Trump administration, notably the elimination of sure hydrogen-related subsidies. This coverage uncertainty rapidly revealed the true economics of hydrogen manufacturing. With the incentives eliminated, the challenge’s already tenuous monetary viability vanished, prompting Fortescue to write down off roughly $150 million in pre-tax losses.

In Australia, Fortescue’s PEM50 hydrogen plant in Gladstone had already commenced partial operations. The challenge had secured roughly $40 million (about A$60 million) in authorities grants. Regardless of preliminary optimism, the ability proved pricey and uncompetitive. Consequently, the corporate determined not solely to close the ability down however is now evaluating whether or not the federal government grants will should be repaid. This situation highlights the basic financial problem going through hydrogen initiatives globally. With out in depth subsidies, hydrogen struggles in opposition to cheaper, extra established vitality options.

Fortescue’s cancellations should not remoted incidents. A current Reuters evaluation catalogued an in depth listing of deserted or postponed inexperienced hydrogen initiatives globally. Firms reminiscent of BP, Shell, ArcelorMittal, Iberdrola, and Woodside have shelved or considerably scaled again main hydrogen-for-energy initiatives attributable to escalating prices and market realities. I’d famous as a lot a few weeks in the past, writing in regards to the brutal 30 days hydrogen had skilled, with tens of billions of challenge commitments and one million tons of hydrogen a 12 months of projected provide disappearing in a puff of crimson ink.

The European Union initially set an bold purpose of 40 gigawatts of electrolyser capability by 2030, but present projections recommend the trade will fall far brief, with solely round 12 gigawatts anticipated to materialize, and that’s nonetheless optimistic. The sensible challenges of hydrogen infrastructure, together with storage, distribution, and demand uncertainty, proceed to impede progress, regardless of the beneficiant subsidies beforehand made out there.

In mild of those tendencies, one would anticipate policymakers, notably these within the UK, to take cautious word. The UK authorities is presently finalizing its Autumn 2025 hydrogen technique replace, presenting it as “evidence-led.” Nevertheless, an examination of the stakeholders shaping this coverage raises issues.

The UK’s Division for Power Safety & Web Zero (DESNZ), beforehand BEIS, stays extremely dedicated to selling hydrogen past industrial feedstock makes use of. Its April 2025 shortlist of 27 hydrogen initiatives explicitly consists of energy technology, sustainable aviation fuels, and hydrogen use in on a regular basis life. Moreover, its July 2025 Hydrogen Replace continues specific assist for hydrogen transport and storage infrastructure. Coverage bulletins, such because the Hydrogen to Energy Enterprise Mannequin launched in late 2024, reinforce this stance, positioning hydrogen as central to Britain’s vitality transition.

Hydrogen UK, led by CEO Clare Jackson, actively promotes hydrogen’s position in broader vitality functions. The group’s 2024 manifesto argues strongly that hydrogen is crucial for sectors the place electrical energy alone is inadequate. Clare Jackson’s 2025 statements emphasize the significance of government-supported demand insurance policies, warning that billions of kilos in non-public funding hinge upon broader adoption of hydrogen past industrial use. Current reviews from Hydrogen UK underscore their place that hydrogen is crucial for reaching clear energy targets by 2030.

ITM Energy, a number one producer of electrolysers, continues investing considerably in hydrogen infrastructure aimed toward mobility and vitality integration. Regardless of management adjustments since Graham Cooley’s departure in 2022, ITM has secured new contracts targeted on transportation and infrastructure decarbonization, together with collaborations with Deutsche Bahn. This technique signifies a transparent intent to take care of a broad position for hydrogen, particularly in vitality and transport quite than limiting their focus to industrial feedstock manufacturing alone.

Jo Bamford, by way of Ryze Hydrogen, Hygen Power, and Wrightbus, continues to advocate strongly for hydrogen in transportation. His investments emphasize hydrogen-powered buses and heavy transport, pushing past purely industrial makes use of. Current developments, reminiscent of Hygen Power’s renewable-powered electrolyser facility close to Bradford, underline his perception that hydrogen stays viable as an vitality service, particularly within the public transportation sector.

Business Minister Sarah Jones MP persistently champions hydrogen’s broader vitality position throughout the UK authorities. In current public statements tied to the April 2025 funding bulletins (HAR2), she emphasised hydrogen’s potential to energy houses, transport, and aviation, considerably exceeding its conventional industrial makes use of. Her constant advocacy signifies sturdy inside authorities assist for hydrogen’s wider utility within the UK’s vitality future.

The UK’s Hydrogen Advisory Council and Hydrogen Taskforce proceed quietly shaping coverage frameworks supportive of hydrogen-for-energy roles. Though current public statements have been restricted, their ongoing work straight helps initiatives just like the Hydrogen to Energy Enterprise Mannequin. Each teams affect market buildings and demand-creation insurance policies, successfully positioning hydrogen as a core a part of the UK’s long-term vitality planning quite than solely a feedstock useful resource.

Financial advisory councils in Germany and France not too long ago issued sturdy suggestions in opposition to funding hydrogen infrastructure for transportation. France’s Courtroom of Accounts Specificallyly criticized the allocation of over 9 billion euros towards hydrogenarguing the fee per ton of carbon averted, round €520, is dramatically larger than different options like direct electrification. Each German and French financial councils clearly concluded that hydrogen in street freight transport is uncompetitive, inefficient, and economically unjustifiable. They advisable ending public funding for hydrogen in transportation and redirecting assets towards battery-electric automobiles and electrification infrastructure as a substitute.

Given these authoritative statements, Fortescue’s challenge cancellations, mounting international proof and the clear biases of the contributors, the UK’s declare of pursuing an “evidence-led” hydrogen technique is questionable at finest. Moderately than responding to clear financial alerts, British policymakers seem closely influenced by established hydrogen trade pursuits, entrenched foyer teams, and present coverage inertia. This situation dangers creating important stranded belongings and squandering public assets, notably if substantial funds proceed to be allotted to initiatives with out clear, economically sustainable outcomes.

Fortescue’s cancelled hydrogen initiatives present a stark and useful lesson. Tasks closely supported by authorities grants and optimistic early-stage monetary assessments are failing as real-world economics change into clear. UK policymakers ought to be taught from these international examples. Moderately than persevering with down the hydrogen-for-energy path, the UK ought to shift public funding to sectors the place hydrogen genuinely is smart. These sectors are primarily industrial processes, reminiscent of ammonia manufacturing, refining, and steelmaking, the place electrification is impractical. These industries characterize genuinely hard-to-decarbonize areas the place hydrogen has clear, well-documented benefits.

If the UK authorities is honest about being guided by proof, it can recalibrate its hydrogen technique accordingly. Persevering with down the present path, ignoring clear financial alerts from Fortescue and comparable international circumstances, will possible end in substantial financial waste. The Autumn 2025 technique replace represents a important alternative. Policymakers have a transparent selection: embrace financial actuality and restrict hydrogen’s position to industrial functions or proceed supporting economically questionable vitality initiatives. How they select will decide whether or not the UK hydrogen technique finally succeeds or fails.