The Australian Renewable Energy Agency (ARENA) is set to grant up to $432 million in funding to Orica’s Hunter Valley Hydrogen Hub as the second recipient of the Hydrogen Headstart program.
The Hunter Valley Hydrogen Hub will produce renewable hydrogen using a 50MW electrolyser powered by renewable electricity. This hydrogen will replace natural gas in Orica’s ammonia production process, helping to reduce carbon emissions.
ARENA CEO, Darren Miller, said that hydrogen has an important role to play in decarbonising heavy industry, particularly where electrification isn’t possible or where other alternatives are limited or don’t exist.
“Renewable hydrogen is an important decarbonisation lever for applications like ammonia production where hydrogen has traditionally been produced with fossil fuels.
“By replacing natural gas-derived hydrogen with clean, renewable alternatives, projects like Orica’s are helping to decarbonise core industrial processes while preserving domestic manufacturing and unlocking new export opportunities,” Miller said.
“ARENA’s Hydrogen Headstart program is designed to fast-track Australia’s renewable hydrogen industry by supporting large-scale projects that are finding ways to reduce emissions, strengthen industrial competitiveness and position the nation as a global leader in clean energy exports. Orica’s project is a great example of what’s possible.”
The project represents a major step in decarbonising Orica’s existing Kooragang Island Ammonia Manufacturing Facility and producing low-carbon ammonia and ammonium nitrate for domestic use across mining, agriculture and industrial sectors.
As part of the funding process, Orica must now work with ARENA to satisfy a number of conditions and demonstrate its ability to meet a range of contractual milestones before the funding is released.
Funding under the Hydrogen Headstart program is paid based on actual production volumes over a 10-year operating period.
Orica Managing Director and Chief Executive Officer, Sanjeev Gandhi, said, “We’re grateful for this crucial support, which brings us closer to realising the Hunter Valley Hydrogen Hub and advancing the decarbonisation of our Kooragang Island facility – a site we’ve proudly operated for over fifty years.
“We look forward to continuing our collaboration with ARENA and other Federal and State government agencies to support the transition of Orica’s Kooragang Island manufacturing facility and help shape a cleaner, more resilient future for the Hunter region.”
Federal Minister for Climate Change and Energy, Chris Bowen, said the Hunter Valley Hydrogen Hub is securing long-term, high-quality jobs for the region, while decarbonising industries that are vital to our economy.
“This investment shows we can secure existing industries such as ammonia and fertiliser production by transforming how they’re powered – creating new clean-tech jobs and future-proofing the Hunter’s economic base.
“Regional communities like the Hunter will lead the way in Australia’s transformation into a renewable energy superpower – and this project is a great example of what that looks like in practice.”
Federal Member for Newcastle, Sharon Claydon, said the landmark investment puts the region right at the forefront of Australia’s clean energy future.
“The $432 million investment will create good local jobs, drive innovation, reduce emissions, and help position Newcastle and the Hunter as a national leader in renewable energy production.
“This builds on the Federal Government’s significant investments in new energy infrastructure at the Port of Newcastle, in clean energy training at TAFE, and in research and development at the University of Newcastle.
“Newcastle and the Hunter has powered Australia for generations, and with this investment, will continue to do so, but in a way that is sustainable and future focused.”
The project follows the announcement of the first recipient of Hydrogen Headstart, with $814 million allocated to Copenhagen Infrastructure Partners’ 1500MW Murchison Green Hydrogen Project in Western Australia.
To date, ARENA has allocated $370 million to 65 renewable hydrogen projects from early-stage research to deployment. The latest announcement concludes Hydrogen Headstart Round 1, with consultation on Round 2 now open.
