BP has paused its $600 million renewable fuel hub at the former Kwinana oil refinery in Perth, citing the need to enhance capital efficiency and align with government policies.

An industry insider suggested that a lack of government incentives for sustainable aviation fuel and renewable diesel contributed to the decision.

The refinery, operational since 1955, has been undergoing dismantling for two years. BP aimed to repurpose the site for biofuels production, including sustainable aviation fuel and green hydrogen. The facility was designed to convert waste oil, tallow, and used cooking oil into renewable diesel and aviation fuel, which can replace conventional fossil fuels.

BP initially planned to supply local markets, including the mining sector, and attracted interest from European and Japanese buyers. However, the company warned that green hydrogen projects required strong government support.

Investment enthusiasm for green hydrogen has declined. Fortescue’s Andrew Forrest has scaled back some hydrogen initiatives, and the Queensland government recently rejected a $1 billion subsidy request for the $12.5 billion Central Queensland Hydrogen project.

BP had hoped for funding from the federal government’s $2 billion Hydrogen Headstart programme and was among six shortlisted applicants. A final investment decision was expected in 2024, with production set for 2027, though the revised timeline remains unclear.

The project was poised to be one of Australia’s first large-scale sustainable aviation fuel sites, a sector expected to grow as airlines seek lower emissions. BP’s decision follows a broader trend of renewable energy project delays, including offshore wind developer Oceanex Energy scrapping a Western Australian wind farm in favour of east coast developments.For the latest retailer news and information, check out the ServoPro website or to speak to us about how we can help your business contact us.