Two Newcastle hydrogen projects have been shortlisted to share in $2 billion worth of funding from the federal government's Hydrogen Headstart program.
The Hunter Valley Hydrogen Hub and the Port of Newcastle's Green Hydrogen precinct are the only two NSW projects shortlisted among six contenders left in the running to receive funding from the program.
The shortlisting puts Hunter firmly in a race to cash in on an emerging global hydrogen market that is estimated will be worth $1.4 trillion by 2050.
Goldman Sachs estimated in 2022 that, if realised, the region's hydrogen exports could eventually replicate if not exceed the value of existing coal exports.
The Hunter Valley Hydrogen Hub, a partnership between Origin Energy and Orica at Kooragang Island, will produce up to 5500 tonnes of green hydrogen a year and employ about 100 people.
Orica will use most of the hydrogen at its ammonia and ammonium nitrate plant on Kooragang Island, but some will help refuel hydrogen buses and trucks.
Construction is due to start in 2025 and production the following year.
"Development of the project in collaboration with Orica can contribute to the decarbonisation of a safeguard covered facility and provide a cleaner source of energy to support decarbonisation in other sectors," an Origin spokesman said in response to Thursday's announcement.
Committee for the Hunter chief executive Alice Thompson said the Hunter hydrogen hub - the only NSW hub in the national hydrogen strategy - was on the journey to become a global hydrogen leader.
"The opportunity has been confirmed, with the region securing over $1.5 billion in government funding for hydrogen projects, research and associated industry decarbonisation initiatives along with private partnerships."
The Port of Newcastle, in partnership with South Korean energy company Kepco, hope to commence hydrogen production at the Kooragang Island clean energy precinct in 2028.
A delegation of Kepco representatives visited the precinct site - a 220-hectare parcel of port land - earlier this month. The Port and Kepco hope to execute a development agreement in the first half of next year.
"The Port of Newcastle Clean Energy Precinct is and continues to be recognised as not only important for the Port, the Hunter and NSW's economic diversification, but of national significance in the government's decarbonisation plans, playing a vital role in meeting commitments made on emissions reduction targets," Port of Newcastle chief executive Craig Carmody said.
The Hydrogen Headstart program, the largest ever funding scheme for green hydrogen, sought proposals and proponents to help transform Australia into a renewable energy superpower.
The selected projects are among the largest in the world, representing a total electrolyser capacity of more than 3.5 gigawatts across various end uses.
"Renewable Hydrogen is crucial to reaching net zero. With our world-class infrastructure, skilled workforce, abundant resources and energy smarts, Newcastle is poised to lead the nation as a renewable energy superpower," Newcastle MP Sharon Claydon said.
"It is great news that two of Newcastle's major projects have made it through this highly competitive national process and are through to the next round."
Ms Thompson said it was essential that decisive action and targeted policy was essential to allowing the Hunter Region to realise its potential as a global leader in hydrogen.
"With growing urgency and competition to secure the large-scale international offtake agreements that will underwrite investment in a global hydrogen hub based in the Hunter for local industry and export, decisive action and targeted policy is essential," she said.
"Two of the Hunter's keystone projects have now been shortlisted for the $2 billion Hydrogen Headstart Program, including the Origin/Orica Hunter Valley Hydrogen Hub which is one of largest commercial scale hydrogen projects in development in the world.
"The Hunter hydrogen play is real, happening and open for business."
Minister for Climate Change and Energy Chris Bowen said the shortlisting was a major milestone for the industry.
'"We have the largest pipeline of renewable hydrogen projects in the world - Hydrogen Headstart is about supporting these projects to become a reality, as Australia transforms into a renewable energy superpower," Minister Bowen said.
"Renewable hydrogen is crucial to reach net zero, while creating economic opportunities for regional Australia."
Hydrogen Headstart will enable large-scale renewable hydrogen projects to get going by bridging the commercial gap between the cost of producing renewable hydrogen and the market price.
Hydrogen Headstart was announced in the 2023-24 May Budget and the Australian Government is investing in the program through Australian Renewable Energy Agency (ARENA), which co-designed the program with the Department of Climate Change, Energy, the Environment and Water.
