The Tumby Bay District Council has given in-principle support to the Cape Hardy multi-commodity port proposal.
Council chief executive officer Trevor Smith said at this week's council meeting he did not believe officially backing the port was in conflict with the council negotiating conditions from the approvals processes such as infrastructure and social management issues.
"This support is not representing that requirement, we still have to make decisions in the best interest of our residents," he said.
"I denote this as not an alternate of Port Spencer but as an alternate to another port outside of the Eyre Peninsula or South Australia completely."
He said it would not be in conflict with the single use port at Port Spencer and councillor Ricky Trenberth agreed the Port Spencer project could be considered in future.
Mr Trenberth moved the recommendation to support the proposal and said it was a "necessary signal that we are open for business".
The council previously supported Port Spencer before Centrex Metals downgraded its interest in the port in 2015.
The news comes as Iron Road has signed an agreement with Australian renewable energy company The Hydrogen Utility (H2U) to work collectively on developing hydrogen production capabilities at the precinct at Cape Hardy.
H2U is expecting to begin site development of its electrolysis and ammonia production facility at Port Lincoln early next year, but had identified Cape Hardy as the preferred location for a larger green hydrogen production and export hub.
Iron Road managing director Andrew Stocks said the Cape Hardy deep water port was a true multi-user, multi-commodity project that was unlike anything else in the country.
"The unique location, the scale of the Cape Hardy industrial port development offers the opportunity to grow a green manufacturing precinct without impacting an adjacent population centre," he said.
"Unlocking the port potential is also expected to have a positive impact on investment discussions for the wider Central Eyre Iron Project development."
H2U chief executive officer Dr Attilio Pigneri said the precinct would seek to satisfy the growing world demand for decarbonised industrial products and energy.
"The hydrogen infrastructure to be built at Cape Hardy, integrated with the world-class renewable energy resource on the Eyre Peninsula positions the region to grow exports as the markets for decarbonised energy and industrial chemicals in North Asia grow," he said.
Regional Development Australia Whyalla and Eyre Peninsula chief executive officer Dion Dorward said it was pleasing to see the agreement happen as it would help diversify the region's economy and value add to the region's primary industries.
Eyre Peninsula Cooperative Bulk Handling, who is working with Iron Road to develop a grain supply chain network incorporating Cape Hardy has expressed support for the new precinct.