Orica has reached a Final Investment Decision for its Hunter Valley Hydrogen Hub, clearing the way for construction of a renewable hydrogen facility that will be integrated into its existing manufacturing operations at Kooragang Island.
The project will install a 50 megawatt electrolyser capable of producing around 4,700 tonnes of renewable hydrogen each year. Hydrogen will be produced through electrolysis using recycled water and grid connected electricity supported by renewable energy sourcing, before being used to replace natural gas in Orica’s ammonia manufacturing process.
The project received State Significant Development approval before reaching Final Investment Decision in June 2026, with construction scheduled to begin later this year and first hydrogen production planned for early 2029.
Lower carbon ammonia for essential industries
Orica’s Kooragang Island facility produces approximately 360,000 tonnes of ammonia each year, representing almost all of New South Wales’ production capacity.
Renewable hydrogen from the new hub will replace about 7.5 per cent of the site’s natural gas feedstock, producing around 26,600 tonnes of lower carbon ammonia each year while reducing emissions by about 35,000 tonnes of carbon dioxide equivalent.
The lower carbon ammonia will continue to support manufacture of ammonium nitrate and other products supplied to industries including mining, agriculture, food production and health. Orica also sees potential to supply low carbon ammonia to emerging industries such as maritime transport, energy and other industrial applications.
Minister for Climate Change and Energy Chris Bowen said the project would enable essential products such as ammonium nitrate to be manufactured in Australia using Australian made renewable hydrogen.
Building on existing industrial infrastructure
Unlike projects that require entirely new industrial demand, the Hunter Valley Hydrogen Hub will supply an existing ammonia production facility with an established domestic customer base.
Orica Managing Director and Chief Executive Officer Sanjeev Gandhi said the investment reinforced the company’s commitment to maintaining the competitiveness of both its manufacturing operations and the Hunter while strengthening Australia’s sovereign manufacturing capability.
He explained that the project was underpinned by Orica’s existing integrated ammonia production and long term domestic demand, providing a practical pathway for renewable hydrogen to be adopted within heavy industry.
Mr Gandhi also said the company was engaging with Australian and international customers to develop future markets for renewable hydrogen and low carbon ammonia across shipping, transport and power generation.
Supporting industrial capability
The project is expected to create up to 160 construction jobs and around 10 ongoing operational positions, while generating an estimated $75 million in local and regional economic activity during design and construction.
Orica estimates the project will reduce natural gas demand by around one petajoule each year, equivalent to the annual gas consumption of up to 50,000 homes.
The Hunter Valley Hydrogen Hub is also the first project to reach Final Investment Decision under the Australian Government’s Hydrogen Headstart program, which supports large scale renewable hydrogen production through production credits linked to operational performance.
According to ARENA, the milestone demonstrates that renewable hydrogen projects are progressing beyond planning and towards commercial deployment, providing an early example of how existing manufacturing facilities can incorporate renewable hydrogen into industrial production.
Federal Member for Newcastle Sharon Claydon said Newcastle and the Hunter has powered Australia for generations, and is now 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.
