newy.com.au – Orica will proceed with a $432 million Federal Government-backed renewable hydrogen project on Kooragang Island after reaching a final investment decision, paving the way for a 50MW electrolyser near Newcastle.
The chemical producer is moving ahead with its agreement to produce and use renewable hydrogen in the Hunter Valley, supported by a production-based incentive under the federal Hydrogen Headstart program.
The project will supply renewable hydrogen to Orica’s Kooragang Island operations, where the company produces about 360,000 tonnes of ammonia a year, accounting for almost all of NSW’s production capacity. The renewable hydrogen is expected to displace 7.5 per cent of Orica’s natural gas use, delivering emissions reductions at the site.
Once commissioned, the project is expected to be among the largest renewable hydrogen projects operating in the southern hemisphere. Orica estimates that, when operational in 2029, it will reduce emissions by the equivalent of taking 26,500 cars off the road each year.
Climate Change and Energy Minister Chris Bowen said the agreement was an important first step towards making essential products in Australia using local renewable energy.
“Ammonium nitrate is critical to mining, and this project is about making these essential products here at home, using Australian-made renewable hydrogen,” Minister Bowen said.
“Orica is the first project to reach final investment decision under the program, showing Australia’s renewable hydrogen industry is moving from ambition to delivery.”
“This is good for jobs and investment in the Hunter, good for Australia’s energy security, and good for the farmers, miners and transport operators who depend on these products.”
Industry and Innovation Minister Tim Ayres said Orica’s investment would strengthen industrial capability and help secure supply chains relied on by farmers, miners and transport operators.
Federal Member for Newcastle Sharon Claydon said Newcastle and the Hunter had powered Australia for generations and were now helping power the transition to a cleaner economy.
“This investment means good, secure local jobs, lower emissions and the opportunity for Newcastle to remain at the forefront of Australian manufacturing and industry.
“The Albanese Labor Government is backing projects that don’t just talk about the future – they build it. Seeing Orica reach this milestone is fantastic news for our community and reinforces our role as a national leader in clean energy and advanced manufacturing.”
Orica was awarded $432 million through Hydrogen Headstart in July 2025, with funding tied to the project reaching a final investment decision and producing renewable hydrogen. The project is also supported by the $70 million Commonwealth Hunter Hydrogen Hub and $45 million from the NSW Hydrogen Hub Initiative.
Orica is the first company to reach a final investment decision under Hydrogen Headstart, which is administered by the Australian Renewable Energy Agency.
