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Australia commits $283m to Orica's green hydrogen project, as the industry is hesitant

Australia announced on Friday that it will invest A$432,000,000 ($283.82,000,000) in a project to produce green hydrogen, led by Orica. Orica is the largest explosives manufacturer in the world. The investment supports the industry's growth amid a recent wave of cancelled and delayed projects.

The funding will be used to support the Hunter Valley Hydrogen Hub. This hub aims at decarbonising Orica's nearby explosives and ammonia manufacturing operations, and ultimately supplying green ammonia fuel for export.

The Minister for Climate Change and Energy, Chris Bowen, said that the funding of the project on Australia's east coast would help secure the country's energy future. He also stated that green hydrogen is a key component to the government's net-zero goal.

Bowen stated in a press release that the project would also reduce emissions at Orica's ammonia plant and produce green ammonia to be used domestically by mining, agriculture, and manufacturing sectors.

The green hydrogen industry in Australia is now a step closer to success after a number of delays and withdrawals cast doubts on its viability.

Plans to build a A$12,5 billion CQH2 plant in Queensland, Australia, collapsed on Sunday after the project's lead developer, State-owned energy company Stanwell, ceased its involvement. This was one of Australia's most ambitious and advanced projects.

Orica's Hunter Valley Hydrogen Hub was once a joint-venture with Origin Energy. Last year, the power producer pulled out, citing concerns about costs and the challenges in the green hydrogen industry.

Orica stated that the government's support was "essential", in order to bridge the "commercial gap" of the project.

The explosives manufacturer added that in recent months, it has received a lot of interest from potential partners and will work to reach a final decision on investment "in due time".

Sanjeev gandhi, CEO of Orica said: "We are committed to helping our customers achieve their decarbonisation goals through low-carbon products and supporting Orica in its next phase of decarbonisation."

The hub's first phase is expected to produce 12 tonnes of green hydrogen per day, using a 50-megawatt electrolyser powered with renewable energy. (1 Australian dollar = 1.5221 dollars) (Reporting and editing by Kate Mayberry in Sydney)

(source: Reuters)