The NSW government has granted planning approval for one of Australia's largest commercial-scale hydrogen factories in Newcastle.
Planning Minister Paul Scully will announce on Friday that he has given the green light to the Hunter Valley Hydrogen Hub on Kooragang Island next to the Orica ammonia plant.
Origin Energy and Orica formed a partnership in 2022 to develop the $207 million hydrogen plant with $115 million of state and federal government funding.
The companies have not yet made a final investment decision on the project but hope to secure more funding after making a list of six shortlisted projects in the $2 billion federal Hydrogen Headstart Program.
"We welcome the approval as another positive step for the project as we continue towards a final investment decision," an Origin spokesperson said.
"The project is also shortlisted under the Hydrogen Headstart Program and Origin will submit a full application to ARENA by the end of June."
The hub is due to start construction next year and deliver an estimated 55 megawatts of electrolyser capacity by 2026 or 2027, producing up to 4700 tonnes of hydrogen using recycled water and grid-connected electricity.
NSW Minister for Climate Change and the Environment Penny Sharpe said the Kooragang plant would be a "regional cornerstone" of the hydrogen industry which would accelerate NSW's shift towards net zero.
Most of the plant's hydrogen will replace natural gas used at the Orica plant, while the rest will refuel trucks and buses on site and via a proposed network of filling stations in the Hunter and NSW.
The hydrogen produced at Kooragang will save an estimated 52,000 tonnes of greenhouse gas emissions per year at the Orica factory if the project proceeds.
Orica spokesperson Viney Kumar said the project aimed to deliver a "safe, reliable and commercial-scale renewable hydrogen and ammonia supply chain in the Hunter with export potential".
The proponents aim to scale up the plant to 1 gigawatt of capacity over the next decade and eventually make enough hydrogen to export.
Green hydrogen uses renewable energy to split water into hydrogen and oxygen. The hydrogen is a fuel source for industrial and transport applications.
The government said the Newcastle project would generate 160 construction jobs and 10 ongoing roles at the plant.
Mr Scully said the government was committed to seeing viable renewable projects move through the planning system efficiently "to make sure we are working towards our goal of net zero by 2050".
AGL Energy and Fortescue Future Industries are exploring the viability of a hydrogen plant near the Liddell and Bayswater power stations as part of a Hunter Energy Hub featuring grid-scale batteries, solar, wind and pumped hydro.
Minister for the Hunter Yasmin Catley said NSW and the Hunter had the potential to be leading producers of green hydrogen.
She said the government was "investing in the future" of the region and "unleashing the Hunter's potential to once again be a manufacturing powerhouse".
"Workers expect the NSW government to be making investments to unlock new industry in the Hunter and ensure our region has stable, good-paying jobs well into the future," she said.
Federal Newcastle MP Sharon Claydon said the government was committed to helping carbon-intensive regions like the Hunter take advantage of clean-energy economic and job opportunities.
