Chemicals and explosives manufacturer Orica has announced it will invest between A$245 million and A$283 million through to 2029 to develop the Hunter Valley Hydrogen Hub in New South Wales. The decision follows a final investment commitment and builds on nearly A$550 million in government funding, including A$432 million from the federal Hydrogen Headstart program, A$45 million from the New South Wales government's Hydrogen Hub Initiative, and an additional A$70 million from the regional hydrogen hubs program.
The Hunter Valley Hydrogen Hub is planned to produce renewable hydrogen using electrolysis powered by renewable electricity and recycled water, connected to Orica’s existing Kooragang Island ammonia plant. The initial phase includes installing a 50-megawatt grid-connected electrolyser with an expected daily hydrogen production of about 12 tonnes. This output aims to replace roughly 7.5 percent of Orica's natural gas consumption for chemical manufacturing feedstock, which the company has historically sourced as grey hydrogen derived from natural gas.
Orica’s Kooragang Island facility is uniquely positioned on Australia's east coast with direct access to the deepwater Port of Newcastle, facilitating both domestic usage and export opportunities. The hydrogen produced will be integrated into the manufacture of ammonia and ammonium nitrate, key products in the resources and agricultural sectors.
Orica Chief Executive Sanjeev Gandhi emphasized the strategic importance of advancing green hydrogen despite some industry players, such as Andrew Forrest-led Fortescue, stepping back from the technology. Mr. Gandhi underscored the need for bold investment to make green hydrogen viable and indicated the company’s confidence in transitioning from fossil fuels. “This final investment decision marks a critical step in advancing the Hunter Valley Hydrogen Hub,” he said, highlighting the project’s role in maintaining competitiveness and enhancing sovereign manufacturing capabilities in Australia’s Hunter Valley region.
The construction phase is expected to require up to 160 workers, while operations will maintain a smaller workforce of about 10. The hub’s renewable hydrogen output is projected to meet the equivalent annual gas consumption of up to 50,000 homes.
Energy Minister Chris Bowen has also endorsed the initiative, which aligns with broader government objectives to support renewable hydrogen as part of Australia’s energy transition. The Hunter Valley project is seen as a test case in the country’s efforts to reduce emissions and establish a sustainable hydrogen industry.
While Orica is moving ahead with significant investment, the broader hydrogen sector remains divided on its commercial viability and timelines. The company’s commitment contrasts with Fortescue’s more cautious stance, reflecting differing assessments of technological and economic challenges facing green hydrogen development nationwide.