BP Withdraws from World-Leading Australian Green Hydrogen Project

2025/08/08

British oil major BP announced on July 25 that it will withdraw from the large-scale green hydrogen project at the Australian Renewable Energy Hub (AREH). BP will relinquish its 63.57% stake in the project, which is one of the world’s largest planned green hydrogen developments. The move signals BP’s retreat from clean energy and a strategic return to higher-margin oil and gas businesses.

The AREH green hydrogen project is estimated to require total investment of USD 36 billion and is designed to produce 1.6 million tonnes of green hydrogen annually, powered by 26 GW of solar and wind capacity. Following BP’s exit, joint venture partners including InterContinental Energy and CWP Global will need to seek new sources of funding and leadership to move the project forward.

BP’s decision reflects a broader strategic shift driven by investor pressure amid weak share performance. The company had previously aimed to capture 10% of the global hydrogen market by 2030, but earlier this year revised its strategy, announcing it would focus on five to seven clean hydrogen projects over the next decade. BP has also significantly reduced spending on renewable energy and plans to redirect billions of dollars back into its traditional fossil fuel businesses.

Similarly, Shell has increased investment in oil and gas by 20% to USD 10 billion in its 2025 capital budget, while cutting funding for renewable energy projects. Equinor has also announced substantial reductions in its investment and development plans for renewable energy and low-carbon solutions.

BP’s withdrawal from green hydrogen and renewed focus on oil and gas mirrors a broader trend among major energy companies, as they reassess costly green energy investments and strengthen support for traditional energy sources.