Orica secures $432 million in funding for Hunter Valley hydrogen hub
The large-scale hydrogen project near Newcastle has secured major federal backing to help shift one of Australia’s longest-running chemical facilities from fossil gas to renewable hydrogen production.
A long touted renewable hydrogen project in the Hunter Valley has been awarded up to $432 million in federal support through the Albanese Government’s Hydrogen Headstart program. The funding will support Orica’s move to replace natural gas with renewable hydrogen at its ammonia production facility on Kooragang Island, near Newcastle.
The Hunter Valley Hydrogen Hub will use a 50-megawatt electrolyser powered by renewable electricity to generate hydrogen. This will be used in ammonia manufacturing, replacing fossil fuel-based hydrogen and helping to reduce emissions at the long-operating site.
Orica is the second and final recipient in the first round of Hydrogen Headstart, a program run by the Australian Renewable Energy Agency (ARENA) to support large-scale hydrogen projects that aim to decarbonise sectors where alternatives to fossil fuels are limited.
ARENA CEO Darren Miller said 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.
Funding through the Hydrogen Headstart program will be paid over a ten-year period, based on the volume of hydrogen the project produces. Orica must meet a number of conditions and demonstrate its ability to deliver the project before funding begins.
The Kooragang Island plant supplies ammonia and ammonium nitrate to domestic industries including mining and agriculture. The hydrogen hub is expected to support continued local production while reducing carbon output from the site, which has been operating for more than 50 years.
Orica Managing Director and CEO 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.”
The first recipient of Hydrogen Headstart funding, announced earlier this year, was Copenhagen Infrastructure Partners’ 1,500 megawatt Murchison Green Hydrogen Project in Western Australia. With both projects now selected, the first round of the program has concluded.
To date, ARENA has committed $370 million to 65 hydrogen-related projects across Australia, including early research and deployment initiatives. Consultation is now open for the second round of Hydrogen Headstart.
