🕒 Last updated on July 25, 2025
In a surprising move, BP has announced its decision to pull out of a massive green hydrogen project in Australia. The Australian Renewable Energy Hub (AREH) will no longer be operated or owned by the corporation, it announced.
BP Walks Away from Mega Green Hydrogen Project
This project was once seen as one of the world’s largest and most ambitious clean energy plans. It was estimated to cost around $36 billion and was expected to turn Australia into a global leader in green hydrogen production.
Green hydrogen is produced by splitting water using electricity from renewable sources like wind and solar. It’s considered a clean fuel that could one day replace oil, gas, and coal. However, making it is still very expensive, and that’s a big problem. BP’s decision to exit the project comes as the company shifts its focus back to fossil fuels, which continue to bring in steady profits.
A vast 6,500-square-kilometer area in Western Australia’s Pilbara region was intended to be covered by the AREH. That’s an area bigger than the U.S. state of Delaware. It was supposed to generate 26 gigawatts of electricity using only wind and solar power. But now, with BP stepping away, the future of the project is uncertain.
Costly Green Hydrogen Faces Reality Check
BP’s withdrawal is another sign that green hydrogen is struggling to become a reality. Many large companies had once hoped it would be the fuel of the future. But over time, it has proven to be too expensive to produce on a large scale. The idea was to use green hydrogen in industries like steelmaking, transportation, and even power generation. Yet, the high cost of producing renewable electricity—needed to make green hydrogen—is holding things back.
When BP joined the AREH project, the company was trying to reduce its oil business and grow its clean energy division. But this strategy didn’t please investors. BP’s stock did not perform as well as some of its rivals. After leadership changes at the top, the company has now decided to shift back to what it knows best—oil and gas.
BP is not alone. Other companies are also stepping back from their green hydrogen goals. On the same day, Fortescue, another big energy firm, announced it was canceling two hydrogen projects—one in Arizona, USA, and another in Gladstone, Australia. Together, those projects were worth $700 million. Fortescue will now take a $150 million loss before taxes because of this decision.
Big Dreams Face Big Hurdles
The green hydrogen dream has always faced big challenges. The process of splitting water to produce hydrogen requires a lot of electricity. Even if that electricity comes from wind or solar power, it is still expensive. Until these costs come down, producing green hydrogen on a large scale will remain difficult. This is one reason why many projects that looked great on paper are now being delayed, scaled down, or even canceled.
The Australian Renewable Energy Hub was intended to revolutionize the industry. With its large solar and wind farms, it could have produced huge amounts of clean energy. This energy would then be used to create green hydrogen, which could be exported or used within Australia. But now, with BP leaving, the plan faces a serious setback.
BP’s move highlights a growing trend. Energy companies are rethinking their plans and focusing more on what brings profits in the short term. While the world still needs clean energy solutions, the road to a green hydrogen future is proving to be longer and more expensive than expected.
For now, green hydrogen remains more of a promise than a reality. As major players like BP and Fortescue hit the brakes, the world is reminded that turning big ideas into action is never easy—especially when it comes to new and costly technologies. The energy transition may still happen, but it will likely take more time, more innovation, and a lot more money.