The Asian Renewable Energy Hub (AREH), under development since 2017 in Australia, aimed to establish a large-scale renewable energy complex in the Pilbara region of Western Australia. The project was initially launched by Vestas, CWP Energy Asia, InterContinental Energy, and Pathway Investments.

Originally planned for 6 GW of solar and wind capacity, the project’s scale was expanded in 2020 to 26 GW. Of this, 3 GW was intended for local electricity supply in Pilbara, while the remaining 23 GW were designated for producing green hydrogen and ammonia for export to Asian markets. Upon full implementation, the project was projected to deliver up to 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia annually.

In 2022, BP acquired a 40.5% stake in AREH and took over as project operator. In 2024, BP increased its share to 64%.

However, as announced by BP Australia President Lucy Nation, the company has decided to withdraw entirely from the project, stepping down both as shareholder and operator. A BP spokesperson explained that the decision stems from a revised corporate strategy emphasizing upstream oil and gas growth, refining, and a more selective approach to transitional energy investments.

The remaining consortium members have confirmed their continued commitment to the project.

Previously, BP had already exited several renewable and green hydrogen ventures. In February of this year, the company announced a strategic shift to reduce investments in energy transition projects and increase capital spending in oil and gas. BP aims to raise $20 billion from asset sales by the end of 2027.

The company has also divested its U.S. onshore wind power business.

Commentary from the investment division of M24 SunShine

BP’s exit from AREH is another indication of declining prioritization of “green” initiatives within the strategic agendas of major oil and gas firms. Despite public commitments to energy transition, the actual focus is reverting to conventional assets. This could slow the development of large-scale renewable infrastructure projects, particularly in early phases where the involvement of major operators is crucial. For AREH, BP’s withdrawal presents at least a challenge in terms of coordination and new capital sourcing.