The Hunter's hydrogen sector will continue to move forward despite Origin Energy's withdrawal from the Hunter Hydrogen Hub, key stakeholders believe.
Origin shocked many when it announced that it was walking away from a partnership with Orica to develop the $207 million project.
The company said its decision reflected the uncertainty around the pace and timing of hydrogen market's development and the risks associated with developing capital-intensive projects of this nature.
"We have worked hard to evaluate the investment case for hydrogen and are grateful for the strong government support," Origin chief executive Frank Calabria said on Thursday.
He said the company continued to believe that hydrogen would play a role in Australia's future energy mix. However, it had become clear that the hydrogen market was developing more slowly than anticipated.
Committee for the Hunter chief executive Alice Thompson said the Hunter Hydrogen Hub was one of the most important hydrogen projects in Australia.
"Making this work is critical not just for the Hunter, but for Australia's emerging hydrogen economy," she said.
"We understood it was not going to be an easy pathway for hydrogen, and this decision confirms that, even with the level of government support provided to the project.
"It is encouraging that Origin has said they remain open to exploring options for the Hunter Valley Hydrogen Hub, and we know that partnerships between business, industry, research and governments are critical to overcoming the issues."
Business Hunter chief executive Bob Hawes said whilst Origin's decision to withdraw from the Newcastle project would not send a positive message to the market, it did not mean other projects and proposals around hydrogen would not surface or continue to progress.
"We recognise many people and agencies in government as well as the research and industry sectors have worked tirelessly and will continue to work on initiatives around green hydrogen and its development opportunities and we don't believe the decision should or will bring all that to an end," he said.
"As a region in transition, we have to be alive to setbacks and recognise that it is important that we work to a multi-pronged strategy so setbacks are at worst a speed hump and not a dead end in the road to a decarbonised green energy future and a net zero economy."
The Committee for the Hunter released a Hunter Hydrogen Infrastructure Masterplan earlier this year, which made the case for making the Hunter Region a Special Economic Area in order to attract investment needed for the region to become Australia's leading hydrogen hub.
Ms Thompson said hydrogen represented a key opportunity for the Hunter as its economy transitioned away from fossil fuels.
"Hydrogen is critical to heavy industry decarbonisation and our established industries like Orica," she said.
"It will create new jobs and economic opportunities, leveraging the things we are already good at including manufacturing, energy and clean tech, and our established infrastructure, skills and trade base."
The Hunter Hydrogen Hub was one of six shortlisted for Hydrogen Headstart funding, through the joint venture with Orica.
"Orica have made it clear that they have not withdrawn from the project at this stage and remain committed to a clean energy future for their Kooragang Island site and the Hunter more broadly," a spokeswoman for Energy and Climate Change minister Chris Bowen said.
"Origin have made it clear that they see continued investment in renewables and storage as their priority at this stage."
More than 50 companies are continuing to progress hydrogen investments in Australia.
