The Hon Chris Bowen MP, Minister for Climate Change and Energy
Senator The Hon Tim Ayres, Minister for Industry and Innovation
Sharon Claydon MP, Member for Newcastle
Australian-made renewable hydrogen has taken a big step after chemical producer Orica reached Final Investment Decision (FID) and is proceeding with its $432 million agreement with the Albanese Government to produce and use renewable hydrogen in NSW's Hunter Valley.
The production-based incentive is supporting Orica to install and operate a 50MW electrolyser on Kooragang Island near Newcastle.
Orica's facility produces approximately 360,000 metric tons of ammonia per year, accounting for almost all of NSW's production capacity. The renewable hydrogen will displace 7.5 per cent of Orica's natural gas use, delivering immediate and meaningful emissions reductions.
Once commissioned, the project is expected to be amongst the largest renewable hydrogen projects operating in the southern hemisphere.
Minister for Climate Change and Energy Chris Bowen said the agreement was an important first step towards making more essential products in Australia using Australian 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.
The Albanese Government established Hydrogen Headstart to turn promising projects into real investment, real construction and real emissions reductions.
"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."
Minister for Industry and Innovation and Minister for Science Tim Ayres said this is exactly the kind of project a Future Made in Australia is supporting.
"Orica's investment will strengthen Australia's industrial capability and help secure local supply chains that Australia's farmers, miners and transport operators rely on.
*The Albanese Government is backing Australian industry to invest in and adopt new technology - backing and creating good jobs in the Hunter and the regions."
Federal Member for Newcastle Sharon Claydon said Newcastle and the Hunter has powered Australia for generations, and now we're helping power the transition to a cleaner, more sustainable 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 the Hydrogen Headstart program in July 2025, with funding tied to the project reaching a Final Investment Decision (FID) and producing renewable hydrogen. The project is also supported through the $70 million Commonwealth Hunter Hydrogen Hub and $45 million from the NSW Hydrogen Hub Initiative.
Once operational in 2029, Orica estimates it will reduce emissions by the equivalent of taking 26,500 cars off the road per year.
Orica is the first company to reach FID under the Hydrogen Headstart program which is administered by the Australian Renewable Energy Agency (ARENA).
