Billionaire mining magnate Andrew Forrest is abandoning an ambitious green hydrogen target, by slashing up to 700 jobs in a sweeping restructure of Fortescue Metal Group.
For years, Mr Forrest has been a leading advocate for renewable energy, setting a target to produce 15 million tonnes of green hydrogen by 2030.
But the decision to axe hundreds of jobs is casting doubt over that vision.
Andrew Forrest maintains this is not the case.
"We're not pulling back, this is something which I really genuinely believe in, I'm a hardcore bloke from the bush, I'm a miner, I'm a practical person, I've also had the good fortune to have an education in Australia, so I've really looked hard at the science. So I just know that going the way we're going with fossil fuels isn't an option."
Fortescue is instead shifting its focus to renewable electricity.
It's seen by some as a blow to Labor's plans to make Australia a hydrogen superpower, backed by more than $8 billion of tax-payer funded incentives.
But Prime Minister Anthony Albanese says the government's clean energy plan is on track.
"The fact is that green hydrogen does have an important role to play in our future. We have seen investment and we're seeing that occur right around the world. And Australia is in a position to take advantage of that. Australia's in a position now where there is actually a real transformation happening, with the investment that's happening here with projects like copper string, with the renewable energy that will be pumped into the grid here in North Queensland. It's real and it's happening. The jobs are real and the investment is real."
The Opposition has seized on the Fortescue move to push its controversial nuclear plans.
The Coalition's Climate Change and Energy spokesman, Ted O'Brien, says the government needs to look at more options for Australian energy.
"We cannot as a nation put all our eggs in one basket. We need to have a balanced energy mix. Today's decision also points to the need for more gas. Labor says green hydrogen - it'll do everything. We now know today that the biggest investor in it is saying it's not going to do everything. In fact, he's pulling back. Labor has to stop its anti-gas crusade. We need more gas, we need it immediately."
Australia currently produces and consumes about 500,000 tonnes of hydrogen each year, produced by fossil fuels.
Research director at the Australia Institute, Rob Campbell, says there's been false hope around a hydrogen pivot, driven largely by overseas policies from Japan and South Korea.
"The reality is, the demand for hydrogen and clean hydrogen in particular, just hasn't materialised. Japan has been missing every target it sets, it doesn't look at all on track. I really think hydrogen's role has been much more in running political cover and greenwash for expanded fossil gas exports."
A state and federal Energy Minister's meeting is set for tomorrow with calls to see gas and hydrogen top of the agenda.
