The Central Queensland Hydrogen Project (CQ-H2), being developed by Stanwell Corporation, plans to install at least 640MW of electrolysis to produce green hydrogen for local industry and export markets.

Despite securing federal backing, H2 View understands that Queensland’s government, headed by Liberal David Crisafulli, rejected an AUD $1bn ($614m) funding request from Stanwell through the Australian Renewable Energy Agency (ARENA).

Sources have reportedly told local news outlets that over 140 people have been laid off from the CQ-H2 project, which was expected to reach a final investment decision (FID) this year.

Speaking to Sky News Australia, Nationals MP Colin Boyce, called the government’s move a “common sense decision,” adding that the plans for renewable capacity up and down the nation’s east coast are “economic insanity.”

Having been teed up for a slice of a AUD $4bn ($2.46bn) federal funding programme, the project could have expanded to 2.24GW of capacity to produce 800 tonnes of green hydrogen per day by 2031.

Federal Climate Change and Energy Minister, Chris Bowen, described the state’s funding decision as “surprising and disappointing,” according to the Australian Financial Review.

Stanwell has already brought in Worley to undertake the project’s front-end engineering and design (FEED) work.

H2 View has contacted Stanwell Corporation and Worley for comment on the announcement.