Plans for a $116 million hydrogen electrolyser factory in Queensland appear to be falling apart. 

Fortescue Metals has reportedly lost its partner in the scheme - US hydrogen company Plug Power - to build the “world’s largest” electrolyser factory near Gladstone.

“We decided we didn’t want to build a factory with them [Fortescue] because we saw the economics; we could do better,” Plug chief executive Andrew Marsh has told investors.

The deal between Plug and Fortescue signed in October 2021 says the companies pledge to “equally” fund the construction of a “two gigawatt factory” making proton exchange membrane (PEM) electrolysers at Gladstone.

The electrolysers were to use renewable power to split water into its constituent parts, creating “green” hydrogen fuel. 

Plug was to supply the electrolyser and hydrogen fuel cell technology to the partnership, with Fortescue expected to buy 250 megawatts worth of Plug’s “electrolyser solutions”.

But Mr Marsh now says that his company is willing to sell electrolysers to Fortescue even though it no longer wants to build factories with Fortescue.

“We really didn’t think that [factory] was worthwhile to move ahead, though we are still working with them [Fortescue] on electrolysers,” said Mr Marsh.

“There is no better green hydrogen plant folks in the US than us, so we really don’t need a lot of help.”

Fortescue says its planned Gladstone factory will still be delivered on time.

“Both businesses have evolved, and we were naturally looking to ensure the existing partnership still stood to deliver value to both companies,” a spokesperson said.

“While that was determined not to be the case for the partnership in its current form, any future collaboration with Plug, including around the potential supply of electrolysers to FFI, will aim to achieve this.

“Fortescue remains on track to produce Australian-made electrolysers from our Gladstone facility in 2023, and product testing and validation is on schedule.”