ARENA backs Orica on renewable hydrogen production

The Australian Renewable Energy Agency (ARENA) has announced that up to $432 million in grant funding will be awarded to Orica’s Hunter Valley Hydrogen Hub as the second recipient of ARENA’s Hydrogen Headstart Program.

Orica’s Hunter Valley Hydrogen Hub (HVHH) will produce renewable hydrogen using a 50 MW electrolyser powered by renewable electricity. This hydrogen will replace natural gas in Orica’s ammonia production process, helping to reduce carbon emissions.

ARENA CEO Darren Miller said that hydrogen has an important role to play in decarbonising heavy industry, particularly where electrification isn’t possible or where other alternatives are limited or don’t exist.

“Renewable hydrogen is an important decarbonisation lever for applications like ammonia production where hydrogen has traditionally been produced with fossil fuels,” he said. “By replacing natural gas-derived hydrogen with clean, renewable alternatives, projects like Orica’s are helping to decarbonise core industrial processes while preserving domestic manufacturing and unlocking new export opportunities.”

The project represents a major step in decarbonising Orica’s existing Kooragang Island ammonia manufacturing facility and producing low-carbon ammonia and ammonium nitrate for domestic use across mining, agriculture and industrial sectors.

As part of the funding process, Orica must now work with ARENA to satisfy a number of conditions and demonstrate its ability to meet a range of contractual milestones before the funding is released. Funding under this program is paid based on actual production volumes over a 10-year operating period.

“We’re grateful for this crucial support, which brings us closer to realising the Hunter Valley Hydrogen Hub and advancing the decarbonisation of our Kooragang Island facility — a site we’ve proudly operated for over 50 years,” said Orica’s Managing Director and Chief Executive Officer, Sanjeev Gandhi. “We look forward to continuing our collaboration with ARENA and other federal and state government agencies to support the transition of Orica’s Kooragang Island manufacturing facility and help shape a cleaner, more resilient future for the Hunter region.”

This project follows the announcement of the first recipient of Hydrogen Headstart, with $814 million allocated to Copenhagen Infrastructure Partners’ (CIP) 1500 MW Murchison Green Hydrogen Project in Western Australia. With both projects now announced, Hydrogen Headstart Round 1 has now concluded.

To date, ARENA has allocated $370 million to 65 renewable hydrogen projects from early-stage research to deployment.

Image credit: iStock.com/Merrillie