Regional Development Minister Shane Jones has set aside $30 million from the Regional Infrastructure Fund for hydrogen projects, and committed a further $15 million to a Southland plant that would pull critical minerals and hydrogen out of quarry rock.
The two decisions were announced on Wednesday, 12 August 2026, alongside a third package worth about $15.5 million for wharves, fuel storage and air connections in the Chatham Islands. Three spending announcements from the same fund in a single day is unusual, and together they account for roughly $60 million.
Jones made the hydrogen announcement at a sector gathering in Christchurch. In a statement released by his office he said hydrogen “has huge potential to become a valuable part of a diversified and resilient renewable energy future for New Zealand” and that it “could play an important role in reducing emissions in parts of the economy where electrification isn’t the best option”.
That last point is the practical case for hydrogen in New Zealand. Battery electric technology handles cars and light trucks well, but struggles with heavy freight, and it cannot easily supply the very high temperatures that industrial processes need. Hydrogen is one of the few options that can.
It is worth being precise about what the $30 million actually is. No company has been handed the money. Kānoa, the government unit that runs regional economic development and investment, will assess both existing and new applications to the fund against hydrogen criteria. In other words, the Government has opened a window rather than picked a winner.
Jones also said he intends “to seek in-principle Cabinet decisions on a regulatory framework in the coming weeks”. New Zealand still has no settled legal regime for hydrogen that occurs naturally underground, sometimes called white hydrogen, or for hydrogen generated underground by pumping fluids into rock, known as orange hydrogen. Without that framework, nobody can be confident about who owns the resource or what consents apply, which makes investment difficult.
The second announcement is more concrete. The fund will put $15 million into Aspiring Materials Limited to help build a commercial scale facility in Southland costing about $31 million. The money will be a mix of loan and equity, with the final terms still being worked out. Jones said the funding comes from $80 million already ringfenced inside the fund for critical minerals projects, so it is not new money on top of the $30 million hydrogen window.
Aspiring Materials is a Christchurch company. Its process takes olivine, a common greenish rock, and breaks it down into magnesium hydroxide, reactive silica, nickel and iron, with hydrogen and oxygen produced along the way. The company describes its output as magnesium for water treatment, agriculture and alloys, nickel mixed hydroxide for batteries, and silica for construction.
Southland is a logical home for it. The company told the Otago Daily Times that Greenhills made sense because two active quarries there produce large volumes of olivine, and the Tiwai Point aluminium smelter sits across the road, which matters if you want to make magnesium alloys. The company opened the first stage of a pilot plant in Christchurch in 2025 processing 250 kilograms of rock a day, with a second stage lifting that to a continuous tonne a day.
New Zealand’s hydrogen record so far is thin but not empty. The most advanced project is at Kapuni in South Taranaki, where Hiringa Energy and fertiliser maker Ballance Agri-Nutrients are pairing four wind turbines with an electrolyser. Hiringa announced financial close on the project, which is designed to produce up to two tonnes of hydrogen a day and feed a refuelling network with sites at Wiri in south Auckland, Te Rapa in Hamilton, Palmerston North and Tauriko near Tauranga. That project took roughly seven years and two rounds of court action to get to construction, which is a useful reminder of how long these things take.
The Regional Infrastructure Fund itself is a political creature. The $1.2 billion fund came out of the New Zealand First coalition agreement and Jones has run it since 2024. It was set up to lend and invest rather than hand out grants, with the bulk of the money aimed at resilience work such as flood protection and energy security, and a smaller share at projects meant to lift regional productivity.
Critics have compared it to the $3 billion Provincial Growth Fund that Jones ran under the previous Labour led government, which National attacked at the time. Supporters argue the two are different because the new fund mostly takes loans and equity stakes, so taxpayers can get money back. Both arguments will be tested when the fund’s investments either return a dividend or do not. Voters can check where each party sits on regional spending and energy policy using our voting tool ahead of this year’s election.
The Chatham Islands package covers $9.4 million of wharf work, including a full replacement of Kaingaroa Wharf and repairs at Owenga and Flower Pot, $5.6 million for fuel storage and distribution at Waitangi Wharf, and $465,000 to expand an interlining agreement between Air Chathams and Air New Zealand so travellers can book a single connected itinerary. Jones said the islands’ isolation means reliable links with the mainland matter for “economic sustainability, education, healthcare, tourism and businesses”.
Two things are worth watching from here. The first is whether Cabinet signs off a hydrogen regulatory framework in the timeframe Jones has flagged, because the $30 million window means little without it. The second is whether the Southland plant reaches a final investment decision, since government backing of $15 million still leaves roughly half the build cost to be found elsewhere.
What do you make of the Government putting public money into hydrogen and critical minerals? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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