Australia’s government is supporting with grant funding the development of a green hydrogen project in the country, which has recently seen setbacks in the sector with major projects canceled or halted.
Australia, via the Hydrogen Headstart Program of Australian Renewable Energy Agency (ARENA), will back Orica’s Hunter Valley Hydrogen Hub with grant funding of $283 million (AUS$432 million), the government said on Friday.
The Hunter Valley Hydrogen Hub (HVHH) project will produce renewable hydrogen using a 50-megawatt electrolyzer powered by renewable electricity. This hydrogen will replace natural gas in Orica’s ammonia production process, helping to reduce carbon emissions.
The project would help decarbonize Orica’s existing Kooragang Island Ammonia Manufacturing Facility and producing low-carbon ammonia and ammonium nitrate for domestic use across mining, agriculture and industrial sectors.
The funding is the second to a green hydrogen project this year following the $534 million (AUS$814 million) grant awarded to Copenhagen Infrastructure Partners’ Murchison Green Hydrogen Project in Western Australia. Together, these two investments mark the conclusion of Hydrogen Headstart Round 1.
“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,” said Chris Bowen, Minister for Climate Change and Energy.
Australia, one of the world’s top LNG exporters, last year said it would develop a domestic green hydrogen industry and export clean hydrogen in a bid to become a global hydrogen leader.
However, amid rising costs and inflation, the market has soured in recent months.
Just last month, Stanwell said it had discontinued its involvement in the Central Queensland Hydrogen Project (CQ-H2) project and other hydrogen development activities. The multi-billion CQ-H2 project was worth $9.2 billion (AUS$14 billion) and had planned to start exporting green hydrogen to Japan and Singapore by 2029.
By Tsvetana Paraskova for Oilprice.com
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