Sparc Technologies (ASX:SPN) has dipped -2.6% on Wednesday along with a broader market downturn, even after finally getting on track with constructing a green hydrogen pilot plant in South Australia.

Shovels have hit the dirt towards building up the “first-of-its-kind” facility set for commissioning in mid-2025. That’s only three months away.

Sparc’s facility could prove to be, at least in the Australian market context, a reassessment of where enthusiasm lies for the hydrogen thematic, which dominated headlines in the early 2020s, then died during COVID-19.

That could particularly be the case given Fortescue (ASX:FMG) are effectively a JV partner in the project (despite technically not being a JV, per se).

Fortescue matters because its chief Twiggy Forrest was mad for green hydrogen only a year ago, before he wrapped the miner’s green hydrogen arm back into the main iron ore company. Around 700 jobs were lost, mainly in Fortescue Future Industries.

To be fair, Wednesday’s share price decline is hard to pin on hydrogen particularly, or anything else really, given the larger Donald Trump storm.

Major infrastructure components for the pilot plant – given it’s three months off commissioning, we’re talking a small asset here (one also backed up by support from the University of Adelaide) – are on route from Europe and Sparc has had some success this year licensing its H2 reactor tech.

But that hasn’t been enough to significantly boost the share price through what has been a turbulent year to date. (While YTD returns are up +15%, 1Y returns are down nearly -29% as at 2pm Sydney time.)

What Sparc is ultimately hoping it can do with this pilot plant is prove the potential to produce green hydrogen at low cost.

To remind, green hydrogen typically describes that produced from the electrolysis of water powered by solar, not gas-fired or coal-fired electricity.

But Sparc is looking to ditch electrolysis in favour of photocatalytic water splitting – a similar technology which despite its potential is still nascent and beset by hurdles.

Also worth noting is that electrolysers aren’t exactly common to come across. During the early 2020s, driven in part by the hydrogen craze, the world actually observed an electrolyser shortage. Fortescue, in 2023, intended to make its own in QLD. That fell by the wayside last year.

The implication Sparc is getting at, technicalities of production methodology aside, is that the east coast’s rising gas prices mean higher power prices as gas-fired electricity, to which Australia is largely focusing on transitioning away from coal, thus hurting progress in the hydrogen sector.

(Just don’t mention you can’t port hydrogen gas through traditional oil and gas pipelines.)

“In an environment where major challenges exist for hydrogen projects due to the high cost of power, the requirement for new solutions to unlock low-cost green hydrogen without relying on electrolysers has never been higher,” Sparc MD Nick O’Loughlin said on Wednesday.

“It is very rewarding to see progress being made both at Roseworthy and in the factory towards delivering a globally leading facility for green hydrogen production via photocatalytic water splitting.”

All in all: One to keep an eye on for hydrogen’s true believers.

SPN last traded at 18.5cps.

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