Orica: new Headstart funding to progress the Hunter Valley Hydrogen Hub
By on July 04, 2025
50 MW electrolysis plant to feed ammonia production
Click to learn more. The Hunter Valley Hydrogen Hub, located adjacent to Orica’s existing ammonia production facility on Kooragang Island, Newcastle. Source: Orica.
The Australian Renewable Energy Agency (ARENA) has conditionally awarded AU$432 million in hydrogen production credits to support the operation of the Hunter Valley Hydrogen Hub, subject to FID and other conditions being met. Located in Newcastle adjacent to Orica’s existing ammonia production facility on Kooragang Island, the grid-powered, 50 MW electrolysis plant will produce 12 tons of renewable hydrogen feedstock each day, displacing around 7.5% of gas feedstock consumed. This first phase will result in the production of more than 26,000 tons of low-emission ammonia each year. Currently, Orica produces 360,000 tons of gas-based ammonia each year on Kooragang Island, which is subsequently used in the onsite production of nitric acid and ammonium nitrate.
We’ve been operating our Kooragang Island facility for over 50 years, and we’re committed to ensuring both our manufacturing facility and the Hunter Valley region remain sustainably competitive. Through the Hunter Valley Hydrogen Hub, we hope to further contribute to our domestic and international customers’ decarbonisation goals by offering low-carbon products, while supporting Orica’s next phase of decarbonisation.
A supportive regulatory environment and continued collaboration with Government and energy providers is required to solve some of the more complex challenges facing the manufacturing industry in Australia and secure a Future Made in Australia.
Orica’s Managing Director and Chief Executive Officer, Sanjeev Gandhi, in his organisation’s official press release, 4 July 2025
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.
ARENA’s CEO Darren Miller, in his organisation’s official press release, 4 July 2025
This project follows the announcement of the first recipient of Hydrogen Headstart, with AU$814 million allocated to Copenhagen Infrastructure Partners’ Murchison Green Hydrogen Project in Western Australia. Hydrogen Headstart Round 1 has now concluded, and ARENA has indicated that consultation for Round 2 is open: interested parties can seek more information via ARENA’s website.
The Hunter Valley Hydrogen Hub was granted planning approval by the New South Wales state government in May 2024, but suffered a significant setback in October when original partner Origin Energy withdrew from the project. In the new funding announcement, Orica indicates that it has since received “strong interest from a range of potential project partners, including those with long-term investment horizons and a strategic focus on developing renewable energy assets and markets for low-carbon ammonia”.