Hydrogen Headstart Round 2

Hydrogen Headstart – Round 2

  • EOI due date: 8 December 2025
  • Total funding pool of $2 billion available under Round 2.

Hydrogen Headstart Round 2 is a competitive funding initiative led by the Australian Government and delivered through ARENA. It is designed to accelerate the development of large-scale renewable hydrogen projects, supporting first-mover ventures that will help scale Australia’s hydrogen industry and contribute meaningfully to national decarbonisation efforts.

The program aims to produce renewable hydrogen at scale, support domestic decarbonisation, and build industry capability. It seeks to unlock new economic opportunities in manufacturing and exports, improve price transparency, and reduce barriers to future hydrogen deployments. A key focus is also on fostering knowledge sharing across the sector.

Key Requirements

Expected outcomes include the establishment of commercial-scale hydrogen production, the strengthening of supply chains and development of a skilled workforce, and the reduction of costs through improved efficiency in hydrogen technologies. Ultimately, the program is intended to enhance Australia’s global competitiveness in clean energy exports.

Applicants must:

  • Align with program objectives and priority use cases.
  • Demonstrate technical and financial viability.
  • Present a robust project design and risk management plan.
  • Commit to community benefit principles and knowledge sharing.
  • Propose a credible HPC value and co-funding strategy.

What is eligible for funding?

Eligible projects for funding must involve the production of renewable hydrogen or derivative products (such as green ammonia) using renewable energy. These projects should be Australian-based and aligned with priority use cases identified in the National Hydrogen Strategy, including green metals (iron and alumina), ammonia, long-haul transport (heavy road, shipping and aviation), power generation and grid support, and other industrial applications.

Eligible activities and costs for funding include those that contribute to reducing the cost of renewable hydrogen production. This may involve innovative construction methods and design optimisation to lower capital costs, improving the efficiency of electrolysers, reducing the cost of renewable electricity, and enabling flexible plant operations. Projects may also focus on de-risking and proving the viability of end-use infrastructure.

Funding is provided in the form of Headstart Production Credits (HPCs), which are paid per unit of eligible hydrogen or derivative product produced over a maximum of ten years. The value of the HPC is proposed by the applicant and should reflect the commercial gap between the cost of production and the expected sales price, including a reasonable return on capital.

What companies are eligible for funding?

Applicants must:

  • Be incorporated entities operating in Australia.
  • Propose projects that meet eligibility and merit criteria.
  • Demonstrate capacity to deliver large-scale hydrogen production.
  • Engage with local communities and support workforce development.

Is this grant competitive or entitlement based?

Competitive. Your application will be assessed among other applications by a judging panel.

How can I increase my chances of winning this grant?

By engaging an accredited government grants consultant, such as Avant Group.

Competitive grants often require significant business case development and project analysis to support the application, this may include detailed presentations supporting the project’s merit, projected sales, cost-benefit analysis and more.

As part of your engagement with Avant Group, your account manager will assess the required documents and will provide the following as needed to support your grant submission.

Grant application writeup including a detailed presentation illustrating how the grant funding will contribute to your project, how the funding will contribute to the project’s budget, a project milestone plan, delivery timeline, impact on employment if applicable and a breakdown of the management and leadership team for the project

  • Industry analysis presentation
  • Competitor Analysis Presentation
  • Marketing and Sales Analysis Presentation
  • 3-5 year Cashflow Forecast
  • 3-5 year Balance Sheet Forecast
  • Cost-Benefit Analysis of Grant Funding
  • End-to-end grant application including information collating, analysis and application writing
  • CAPEX (Capital Expenditure) cost-benefit analysis
  • Stakeholder relations and Risk Mitigation Plans
  • Any other relevant forecasting that will support your application

How can I get help with my application? Or know if I’m likely to win funding?

Avant Group offers a no-obligation assessment of your eligibility for funding and will assess your likelihood of a successful grant application.