Orica has reached a final investment decision (FID) to proceed with its Hunter Valley Hydrogen Hub after it secured AU$432 million in funding from the Australian Renewable Energy Agency (ARENA).
The project is the first major grantee under the federal government’s Hydrogen Headstart program, which aims to fund renewable hydrogen projects for real-world industrial use.
Located at Kooragang Island in New South Wales, the hub will feature 50 megawatts of electrolyser capacity powered entirely by renewable energy. Once operational, the facility will produce approximately 4,700 tonnes of green hydrogen each year.
This renewable hydrogen will directly replace traditional natural gas feedstock currently used in the production of ammonia at Orica’s existing plant.
By swapping fossil fuels for clean energy, the project will significantly decarbonise one of the nation’s most carbon-intensive manufacturing processes while simultaneously anchoring a domestic market for the emerging hydrogen economy.
ARENA CEO Darren Miller praised Orica’s commitment, highlighting the project’s vital role in tackling emissions within hard-to-abate sectors where alternative technologies are limited.
“Hydrogen is a complex, capital-intensive industry, but it represents a significant economic and decarbonisation opportunity for Australia,” Miller said.
“This decision signals that renewable hydrogen production can be deployed at scale in Australia, shifting the conversation from concept to deployment.”
To bridge the initial commercial gap between production costs and market prices, the Hydrogen Headstart program provides successful projects with a production credit delivered over a ten-year period.
The initiative builds on ARENA’s extensive backing of the local sector, with the agency investing more than AU$396 million across 68 separate renewable hydrogen projects over the past decade.