The Swiss commodities trading group Trafigura has announced the abandonment of its green hydrogen plant project in Port Pirie, South Australia. The project, valued at approximately 750 million Australian dollars (around 471 million USD), was initially intended to reduce carbon emissions from the local lead smelter. The announcement follows the completion of a feasibility study jointly funded by Trafigura and the South Australian regional government. The company did not disclose specific reasons for withdrawing but confirmed it would not advance beyond the preliminary stage.
A major project halted in Port Pirie
The South Australian government clarified that the initiative never progressed beyond the preliminary evaluation phase and was not incorporated into current strategic plans. Originally, this significant project aimed to support local industry decarbonization by supplying green hydrogen, produced through water electrolysis powered by renewable electricity. The feasibility study, launched in 2021 and recently completed, assessed the economic, commercial, and technical viability of the project. The study’s outcome apparently convinced Trafigura that the conditions required for investment were not met.
Trafigura thus joins a series of companies that have canceled or suspended their green hydrogen initiatives in Australia. These successive cancellations underscore structural barriers currently limiting rapid profitability in this sector. In particular, high infrastructure costs, logistical complexity, and underdeveloped demand are hindering large-scale investments. Despite significant support from the Australian federal government, which continues to fund pilot projects and related infrastructure, the market remains cautious about short-term commercial prospects.
Industry-wide caution prevails
This decision occurs amid broader uncertainty in the international energy sector regarding green hydrogen. Several major industrial and energy groups worldwide are revising their ambitions downward or postponing investment decisions. In Australia, other similar projects have recently been paused or delayed, indicating widespread market caution.
The plant planned by Trafigura represented one of the largest private investments anticipated in South Australia’s green hydrogen sector. Its cancellation raises questions about the current economic dynamics of this emerging energy form and the realistic timing of its mass adoption by industry. This withdrawal also emphasizes the importance of thorough market analyses before committing to significant industrial projects, reminding industry stakeholders of the substantial challenges still to overcome before achieving full commercial maturity.
