Orica has reached a major milestone in Australia’s renewable hydrogen journey after taking the Final Investment Decision (FID) for its renewable hydrogen project in the Hunter Valley, New South Wales. The decision allows the company to move ahead with a $432 million agreement with the Albanese Government to produce and use renewable hydrogen at its Kooragang Island facility near Newcastle.
The project is being supported through the Australian Government’s Hydrogen Headstart program, which provides production-based incentives for renewable hydrogen projects. As part of the project, Orica will install and operate a 50 MW electrolyser to produce renewable hydrogen that will replace part of the natural gas currently used in ammonia production.
Orica’s Kooragang Island facility produces around 360,000 metric tons of ammonia each year, representing almost all of New South Wales’ ammonia production capacity. By using renewable hydrogen, the company expects to replace about 7.5 percent of its natural gas consumption, leading to an immediate reduction in greenhouse gas emissions. Once completed, the project is expected to be one of the largest renewable hydrogen facilities operating in the Southern Hemisphere.
Australian Minister for Climate Change and Energy Chris Bowen said the project marks an important step in producing essential industrial products using Australian-made renewable energy. He noted that ammonium nitrate is a critical product for the mining industry and highlighted that the project would support local manufacturing while reducing emissions. Bowen also said Orica is the first company to reach a Final Investment Decision under the Hydrogen Headstart program, demonstrating that Australia’s renewable hydrogen industry is moving from planning to implementation. He added that the investment would create jobs, strengthen energy security, and support industries such as mining, agriculture, and transport.
Minister for Industry and Innovation and Minister for Science Tim Ayres said the investment would strengthen Australia’s industrial capability and improve the resilience of local supply chains. He added that the Albanese Government is encouraging Australian industries to invest in advanced technologies while creating employment opportunities in the Hunter region and other parts of the country.
Federal Member for Newcastle Sharon Claydon welcomed the announcement, saying Newcastle and the Hunter region have played an important role in powering Australia for many years and are now helping drive the transition to a cleaner economy. She said the project would create secure local jobs, reduce emissions, and strengthen the region’s position as a leader in manufacturing and clean energy.
Orica originally received the $432 million funding commitment under the Hydrogen Headstart program in July 2025. The project has also secured an additional $70 million through the Commonwealth Hunter Hydrogen Hub and $45 million from the New South Wales Hydrogen Hub Initiative. The facility is expected to begin operations in 2029 and is estimated to reduce emissions by an amount equal to removing approximately 26,500 cars from Australian roads each year. The Hydrogen Headstart program is administered by the Australian Renewable Energy Agency (ARENA), with Orica becoming the first company to achieve Final Investment Decision under the initiative.
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