Orica receives $432M conditional funding to develop a renewable hydrogen hub in Hunter Valley, aiding Australia's industrial decarbonisation efforts.
Orica, a global leader in mining and infrastructure solutions and one of Australia’s major manufacturers, has been conditionally awarded AUD $432 million under the Australian Renewable Energy Agency’s (ARENA) Hydrogen Headstart initiative. The funding supports the development of the Hunter Valley Hydrogen Hub (HVHH) located at Kooragang Island in Newcastle. The funding is contingent upon Orica meeting several pre-conditions, including securing a Financial Investment Decision (FID). This grant was awarded under the first round of the Hydrogen Headstart program, designed to foster large-scale renewable hydrogen initiatives that support Australia’s growing hydrogen economy and global export ambitions.
The financial support will serve as partial revenue assistance via production credits once the hydrogen hub becomes commercially operational. This mechanism is intended to help bridge the economic viability gap faced by pioneering renewable hydrogen ventures. The Hydrogen Headstart funding complements previous commitments made by both the Federal and New South Wales Governments to support the HVHH’s establishment.
The HVHH is envisioned as a cornerstone of the region’s decarbonisation efforts. It will produce renewable hydrogen through a 50MW electrolyser, powered by renewable energy and using recycled water. The project received development approval in May 2024. The renewable hydrogen produced will progressively displace natural gas in the production of low-carbon ammonia and ammonium nitrate, both essential inputs for Australia’s resources, agriculture, food, and health industries.
In its first phase, the hub is expected to generate approximately 12 tonnes of hydrogen per day, cutting Orica’s daily natural gas usage for chemical feedstock by about 7.5%. This gas could be redirected for broader domestic use. The environmental benefits are substantial, with annual emissions reduction equivalent to removing around 26,500 cars from roads. The project will also stimulate the regional economy by creating 160 construction jobs and up to 10 permanent roles.
Strategically located at the Port of Newcastle, the hub offers access to established markets and Orica’s existing customer base. The site is also home to the only ammonia plant on Australia’s east coast with direct access to deep-water international shipping routes, enhancing its export potential.
Beyond economic impact, the HVHH aims to deliver social and environmental value to the Hunter region. It supports the shift of a skilled industrial workforce toward clean energy roles and seeks collaboration with Traditional Owners and local communities to ensure inclusive benefits from the renewable transition.
Sanjeev Gandhi, Orica’s Managing Director and CEO, highlighted the project’s strategic importance: “We are committed to ensuring our Kooragang Island facility and the Hunter region remain sustainably competitive. The HVHH aligns with our decarbonisation roadmap and the broader clean energy transition.”
ARENA CEO Darren Miller emphasized that renewable hydrogen is key to decarbonising sectors like ammonia production, historically reliant on fossil-fuel-derived hydrogen. He noted, “Projects like Orica’s help Australia retain manufacturing capability while tapping into global clean energy markets.”
Orica has attracted interest from several potential partners, including those focused on long-term investment and low-carbon energy development. The company continues to evaluate these opportunities ahead of making a final investment decision.
