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Queensland, Australia Turns To Coal and LNG for Hydrogen

Last Updated on 08th January 2024

Dalrymple Bay, Australia's second-largest coal export terminal by capacity, is aiming to become a green hydrogen export hub after owner DBI Group struck an agreement with North Queensland Bulk Ports, Japanese trading house Itochu, and US infrastructure firm Brookfield Group.


For the time being, the agreement will consider potential export routes for Dalrymple Bay green hydrogen, which is produced using renewable energy and emits no emissions.


DBI is looking to diversify and capitalize on government aid in order to get into hydrogen exports. The Queensland government has agreed to support DBI's idea as part of its USD 1.45 billion Renewable Energy and Hydrogen Jobs Fund.


The government has already agreed to fund a 3GW renewable hydrogen project in Aldoga, west of Gladstone, as well as a renewable hydrogen demonstration plant next to the Kogan Creek power station at Chincilla. Gladstone is home to Queensland's three LNG export plants, which are powered by onshore coal-bed methane gas, and is the state's largest coal export facility, with a capacity of 102 million tonnes per year.


Queensland's economy is primarily reliant on coal and LNG exports, and the state government wants to encourage job growth and skill development in hydrogen as the state works to decarbonize.


Coal throughput at the 85 million tonne per year Dalrymple Bay Coal Terminal at Hay Point near Mackay fell by 22 percent from January to July compared to the same period in 2019, owing to the combined effects of Covid-19 and Chinese limitations on Australian coal imports.


The port serves some of Queensland's most marginal coal miners, many of whom reduced exports due to weak prices and are just now beginning to recoup as coal values increase.


DBI, which went public on the Australian Securities Exchange in December of last year, has acquired the ability to raise user fees in order to sustain margins at reduced volumes. However, it risks losing coal customers to other Queensland ports, all of which are running at less than full capacity.


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