Hydrogen Headstart Round 2

Opening soon
Funding up to $4B in total from 2023-24 to 2038-39

As part of the 2024–25 Federal Budget, the Australian Government announced the 2nd round of the Hydrogen Headstart program to support major hydrogen production projects and grow Australia’s clean energy industry. Delivered by ARENA, round 2 aims to strengthen Australia’s position in the global hydrogen market.

ARENA is now seeking input on the proposed program design through a public consultation process. Stakeholders are invited to review the Consultation Paper and provide feedback via the online forms by 31 July 2025.

Key Requirements

To be eligible under Hydrogen Headstart Round 2, projects must involve the production of renewable hydrogen via electrolysis powered entirely by renewable energy. The hydrogen production facility must have a minimum nameplate electrolyser capacity of 50 megawatts and be located at a single site, although adjacent infrastructure such as hydrogen storage or conversion facilities may be included.

The electricity used must be matched with eligible renewable energy certificates (RECs), such as LGCs or REGOs, or be sourced from behind-the-meter renewable generation that does not create RECs. Hydrogen production must take place in Australia, though end uses can be either domestic or export. Funding will be provided through a production-based subsidy mechanism called the Headstart Production Credit (HPC), which is paid quarterly over a maximum 10-year period. Notably, funding will not support upfront capital costs.

What is eligible for funding?

Projects must:

Produce renewable hydrogen (or its derivatives) through electrolysis powered entirely by renewable energy

Match all electricity with eligible RECs or behind-the-meter generation (no RECs created)

Deliver production at or above the 50 MW electrolyser scale

Be located at a single site (adjacent facilities allowed if interconnected; distributed facilities not eligible).

Deliver end products for domestic or export use.

Nominate a realistic production volume cap and HPC value per kg or derivative metric

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.

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