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The Queensland government has launched Supreme Court action against one of Australia’s biggest companies to recoup almost $66 million it ploughed into a failed green hydrogen plant in Gladstone.
The former Labor government handed Andrew Forrest’s Fortescue a $65.97 million grant to help build a green hydrogen electrolyser manufacturing facility in the Central Queensland city in 2021.
Fortescue’s green hydrogen ambitions copped a hit in 2025 when US President Donald Trump slashed tax breaks for clean energy investments, causing the Australian company to abandon plans for a new plant in Arizona.
“The lack of certainty and step-back in green ambition has stopped the emerging green energy markets, making it hard for previously feasible projects to proceed,” Fortescue head of growth and energy Gus Pichot said at the time.
However, documents released to this masthead under freedom of information laws revealed the Gladstone project was struggling long before the US policy shift. Despite $137 million in total state and federal pledges, the plant tested hydrogen electrolysers for just seven weeks before being shuttered – costing taxpayers an estimated $14 million for every week of testing.
In a claim filed in the Queensland Supreme Court on March 17, Deputy Premier Jarrod Bleijie – in his role as state development minister – has sought to force Fortescue to hand Queensland’s $65.97 million contribution back to the state.
Last August, Bleijie described the Gladstone plant as a “vanity project” and blasted the former Labor government’s support for the scheme.
“The state Labor government approved $92.5 million for this project of taxpayer funding, and $65.97 [million] has already been paid to Fortescue under the former Labor government’s terrible deal,” Bleijie said in parliament last year.
“On behalf of Queensland taxpayers, I’ve directed my department to advise Fortescue that the Crisafulli government will issue a notice to comply and a default notice and seek full reimbursement of the $65.97 million towards this now-discontinued project.
“That is value for taxpayers’ money, and we’re going to try to get it back.”
On Thursday, a spokesman for Bleijie said what had started with negotiations with Fortescue had progressed to court action.
“We attempted to negotiate in good faith with Fortescue over several months for the funds to be returned to Queenslanders, but could not reach an agreement and, as such, have commenced legal proceedings to have this matter resolved,” he said.
In response to the court action, a Fortescue spokesman said the company had invested $228 million into the site, which reflected a “significant commitment”.
“Fortescue remains committed to ensuring its investment and the $66 million contribution from the Queensland government is well utilised into the future,” he said.
Earlier this year, a Commonwealth Department of Industry spokesperson confirmed Fortescue repaid $20 million of the $33 million dispersed from the original federal government grant in November.
Comment has been sought from Federal Industry Minister Tim Ayres.
– with Eryk Bagshaw and Nick Toscano
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