Government commits $432m for Orica hydrogen hub despite Origin withdrawal
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The news: Ammonia and explosives manufacturer Orica has secured a $432 million Albanese government commitment for its Hunter Valley Hydrogen Hub despite Origin’s withdrawal from the project in late-2024.
The numbers: Committed through the Australian Renewable Energy Agency-administered (ARENA) Hydrogen Headstart program, the funding will support a 50MW electrolyser powered by renewable energy. The grant will be paid as a production credit once operational.
The project is expected to be capable of producing 4,700 tonnes of green hydrogen annually.
The context: Orica hopes to use hydrogen as a substitute to the natural gas feedstock used to produce ammonia. The Hunter Valley Hydrogen Hub will be co-located with Orica’s ammonia production facilities at Kooragang Island, Newcastle.
Before cash flows Orica will work with ARENA to “meet a number of conditions and demonstrate progress toward key milestones”, according to a release from Climate Change and Energy minister Chris Bowen.
Origin Energy pulled out of the Hunter Valley Hydrogen Hub project in October 2024 citing slow green hydrogen market development as well as input costs and the need for technology advancement.
The project was first announced by Origin in 2022 before entering a joint venture development agreement with Orica in July 2023. The green hydrogen production facility previously received approval to begin construction mid-2025.
The project has already received $115 million in state and federal government funding and was shortlisted for support through the Albanese government’s $4 billion Hydrogen Headstart Program.
Progress at the Hunter Valley Hydrogen Hub follows the shelving of another Hydrogen Headstart-shortlisted at the start of this week.
The CQ-H2, touted as Australia's largest green hydrogen hub, was shelved at the start of this week after lead proponent, government-owned Stanwell Corporation pulled out.
What they said: “This investment shows we can secure existing industries such as ammonia and fertiliser production by transforming how they’re powered – creating new clean-tech jobs and future-proofing the Hunter’s economic base,” Bowen said.
