Australia pledges $283 million to Orica green hydrogen project as industry wavers
SYDNEY, July 4 (Reuters) – Australia said on Friday it would invest A$432 million ($283.82 million) in a green hydrogen project led by Orica (ORI.AX),the world’s largest explosives maker, backing the emerging industry amid a wave of delays and cancelled projects across the country.
The funding will support the Hunter Valley Hydrogen Hub, which aims to decarbonise Orica’s nearby ammonia and explosives manufacturing operations and eventually supply the green fuel and green ammonia for export.
Climate Change and Energy Minister Chris Bowen said the funding for the project on the east coast helped secure Australia’s energy future, with the government seeing green hydrogen as key to its net-zero goals.
Bowen, said in a statement:
By switching from gas to green hydrogen, the project will also significantly cut emissions from Orica’s ammonia production facility and help produce green ammonia for domestic use across mining, agriculture and manufacturing sectors,
It is a boost for Australia’s struggling green hydrogen industry after a series of delays and exits cast doubt on its viability.
On Sunday, plans to build a A$12.5 billion CQ-H2 plant in the state of Queensland collapsed after its lead developer, state-government owned energy company Stanwell, ended its involvement. It was one of the country’s largest and most advanced projects.
Orica’s Hunter Valley Hydrogen Hub, once a joint venture with Origin Energy (ORG.AX),faced a major setback last year when the power producer exited, citing cost concerns and headwinds in the green hydrogen market.
Orica said the government support was “essential” to bridging the project’s “commercial gap”.
The explosives maker added that it had received strong interest from potential project partners in the past few months and would work towards a final investment decision “in due course”.
CEO Sanjeev Gandhi, said:
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,
The first phase of the hub is expected to produce up to 12 tonnes of green hydrogen per day using a 50 megawatt electrolyser powered by renewable energy.
($1 = 1.5221 Australian dollars)
Reporting by Christine Chen in Sydney; Editing by Kate Mayberry
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Australia pledges $283 million to Orica green hydrogen project as industry wavers, source
