Last week, Energy News revealed federal environment minister Sussan Ley refused to sign off on the Asian Renewable Energy Hub (AREH), which would see around 6500sq-km or 1.6 million acres of land cleared to make way for up to 26GW of wind and solar to generate green ammonia for export and domestic use, which would then be converted to hydrogen.
A ministerial spokesperson told Energy News the minister "concluded that the proposal would have unacceptable impacts on matters of national environmental significance".
The impacts cited by the government included the Ramsar wetlands near Eighty-mile Beach and risks to threatened bird species.
"The Minister found the marine component of the infrastructure corridor would disrupt tidal movement and processes, and this would seriously impact the habitats and life-cycle of the native species dependent on the wetland," the spokesperson said.
"Any future amended proposal would be a matter for the proponent."
The consortium developing the project, made up of InterContinental Energy, CWP Energy, and Macquarie, told the ABC they are working to amend plans to allow the project to go ahead.
"We will take [the Minister's] concerns on board as we continue to work on the detailed design and engineering aspects of the project," they said.
"[We] will address fully any concerns in preparing future project referrals."
Conservation Council of Western Australia director Piers Verstegen told Energy News the environmental concerns raised were "sound" but they would normally have been addressed via the state government, saying it was "highly unusual" to pre-empt a state assessment process.
"I have never seen an example of this occurring here in Western Australia. It is highly unusual," he said.
The decision to reject the plan and the speed at which it was made has been questioned by renewable energy advocates and the state government, noting the project's proponents had not yet submitted an environmental plan, and it was granted Major Project Status by the federal government last year.
Western Australia hydrogen and regional development minister Alannah MacTiernan told Energy News she was "surprised" at how quickly the decision was made, noting the project was critical to decarbonising the state's heavy industries.
"Managing environmental impacts of large-scale projects is extremely important, but it is disappointing that in this case, the proponent does not appear to have been given an opportunity to refine the project or respond to concerns," she said.
"Renewable hydrogen presents enormous opportunities for our country, as a job-creating future industry and to decarbonise the world's economy.
"If the federal government is serious about this opportunity, it needs to work cooperatively with industry and state government to progress major projects."
Groups said it would only reinforce the perception that the federal government was favouring fossil-fuel based projects over renewables.
Earlier this year resources minister Keith Pitt rejected a A$280 million funding request by Neoen to go towards a wind farm development in northern Queensland because it wasn't dispatchable, despite planning documents by the proponent showing it included a battery.
The Clean Energy Council told Energy News it was seeking "urgent clarification" from the government to address the perception the decision on the AREH was "inconsistent with well-established processes or with the treatment of non-renewable projects".
"We expect that the Commonwealth will work in partnership with the Asian Renewable Energy Hub to provide the necessary guidance to appropriately assess and address any environmental impacts under the Environment Protection and Biodiversity Conservation Act," The CEC said.
Verstegen said the decision "stands in direct contrast" to the approach being taken to projects like Woodside's Scarborough to Pluto LNG development.
"While the environmental concerns with the Pilbara ammonia export proposal may be valid, it appears the Commonwealth is applying one set of rules to a renewable energy project and a very different set of rules to giant LNG projects," he said.
Australian Centre for Corporate Responsibility director Dan Gocher echoed his comment, telling Energy News the decision "only reinforces everything we know about this government", saying there seemed to be a higher bar renewable energy projects had to clear, compared to fossil fuel projects.
"It is a worrying trend that these projects continue to be blocked or are left unassisted, whereas they seem to want to rollout the red carpet for new oil and gas projects, such as those in the Northern Territory," he said.
Separately over a fortnight ago a court found Ley as environment minister had a duty of care to protect future generations from the effects of climate change which included a possible review of her sign off on an extension of an existing coal mine.
Updated to include comment from the Conservation Council of Western Australia and hydrogen and regional development minister Alannah MacTiernan.