Orica receives $283m from ARENA for Hunter Valley hydrogen hub

Mining and infrastructure solutions provider Orica has received conditional approval for A$432m ($283.8m) in funding from the Australian Renewable Energy Agency (ARENA) to support its Hunter Valley hydrogen hub (HVHH) at Kooragang Island in New South Wales.

The funding is contingent upon meeting certain conditions and milestones.

The financial commitment is part of ARENA’s Hydrogen Headstart programme to fast-track Australia’s renewable hydrogen industry and integrate it into global supply chains.

The grant offers partial revenue support for HVHH through production credits once the project becomes commercially operational.

The New South Wales and federal governments have already pledged support for establishing HVHH.

The HVHH will utilise a grid-connected 50MW electrolyser using recycled water and renewable electricity to produce renewable hydrogen in the first phase. The project received development approval in May 2024.

The green hydrogen produced at the hub will gradually replace natural gas used for manufacturing low-carbon ammonia and ammonium nitrate, which are used across industries such as agriculture, health and food.

Pending final investment decisions (FID), phase one of HVHH is expected to produce 4,700 tonnes per annum of renewable hydrogen.

This could generate 26,600 tonnes of low-carbon ammonia annually, cutting Orica’s natural gas requirement by 7.5% per day.

The reduction equates to an annual emissions benefit parallel to removing 26,500 cars from roads each year.

The project will create 160 construction roles, then up to ten permanent jobs once operational.

Orica managing director and CEO Sanjeev Gandhi stated: “We are thankful for the support of ARENA and both the federal and the New South Wales governments, and we look forward to continuing to work in partnership with the ministers and the responsible agencies on the decarbonisation of Orica’s Kooragang Island manufacturing facility and the Hunter Valley region.

“We see the possibilities for renewable hydrogen in our manufacturing operations, and the potential to support the future of Australia’s hydrogen industry as well as the growth of future jobs and economies in the region.”

The strategic location at Newcastle Port, coupled with established market presence, positions HVHH uniquely within both resource and agricultural sectors.

Its direct port access facilitates international distribution alongside pipeline-based local off-take arrangements, strengthening its commercial viability.

ARENA CEO Darren Miller stated: “Renewable hydrogen is an important decarbonisation lever for applications like ammonia production where hydrogen has traditionally been produced with fossil fuels.

“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.”