The Murchison Green Hydrogen Project in Western Australia has been awarded up to 814 million AUD (511 million USD) in federal production credits, marking a significant step for Australia’s green hydrogen industry.

The 1,500 MW project, led by Danish renewable firm Copenhagen Infrastructure Partners, was announced as the first recipient of the Hydrogen Headstart Program on Thursday by Climate Change and Energy Minister Chris Bowen.

Slated to begin construction in 2027, the project includes a solar and wind farm, desalination plant, and hydrogen production facility. It aims to produce 900,000 tonnes of green ammonia annually, nearly half of Australia’s current fossil fuel-based ammonia output.

“The Hydrogen Headstart Program commits funding to bridge the commercial gap, ensuring projects can move forward,” said ARENA CEO Darren Miller. Funding will be disbursed based on production volumes over a 10-year operational period and only after commercial operation is achieved.

Despite high costs and wavering investor confidence affecting other hydrogen projects, Murchison has secured the first round of Headstart’s 4 billion AUD (2.5 billion USD) allocation. More than 1 billion AUD (600 million USD) remains available, with at least one more project expected to receive funding soon.

The Albanese government is also offering 6.7 billion AUD (4.2 billion USD) in hydrogen production tax credits under the Future Made in Australia program, though projects cannot claim both incentives.

While Murchison faces local opposition over land access issues, the project’s backers see it as a crucial step toward establishing Australia as a global leader in green hydrogen.