Press conference in Newcastle, NSW

SHARON CLAYDON: Good morning, everyone. We’re good to go, I think. It is such an exciting day to be a Novacastrian. It is really – I am delighted to be able to be here with Minister Bowen for a very important announcement, which I’ll come to in a moment. But I’m joined by my parliamentary colleague and electoral neighbour, Minister Pat Conroy. 

And, of course, being on the site of Orica, it’s a really pleasure, thank you, Sanjeev and your amazing team at Orica. Viney, I know, is here as well, all the workforce. This is an announcement that is great news for you guys, for Orica, but also for our region and Australia. And I’d also like to recognise Darren Miller from ARENA that helps make all this possible as well. And as well as the Hydrogen Foundation of Australia.

Well, exciting day because this is one of those industries, Orica, it is one of those big emitters, hard-to-abate industries. This is where the real rubber hits the road in a transition to a net zero economy. And so it is very fitting that Newcastle and this site takes a lead role in doing that today.

The details we’ll come to in just a moment, but I can say to you that this is a very big demonstration of the confidence of the Albanese Labor government has in this region. It’s a very clear understanding that it is regions like ours that have powered the nation for generations, that we will continue to prosper and grow and power our region and this nation as we always have with different forms of energy.

And it builds on a suite of major investments into this region. So this is a huge one today. But, of course, we’ve already made significant investments across in the Port of Newcastle, getting our region ready for this moment. There’s a clean energy precinct underway there a big $100 million investment from the Labor government for that as well. It builds on the investment we made for a net zero centre of excellence and net zero manufacturing at Tighes Hill TAFE. 

Again, you don’t get to do this if you don’t have a skilled workforce, and we’re investing in that pipe been of workers going into the future. And it builds on the big investments we’ve made to the University of Newcastle to ensure that, again, we are doing the innovation, the research and development work that is required to make these new energy sectors thrive and prosper into the future.

So a big day for Newcastle. A big day for you here at Orica, but it’s a big day for Australia. It’s industries like this that will show the way. It’s some nascent new energy industries that will lead the way in Australia, position Newcastle and the Hunter region at the forefront of that work. You are leaders in this nation. You are part of a really exciting future, and we are really, really pleased as a Labor government to be able to back you a hundred per cent.

And on that note, I’m going to hand over to the Minister for Energy and Climate Change, a great friend and, indeed, on this occasion I’m going to call him an honorary Novacastrian because he is in Newcastle, this must be his 13th visit, possibly more. But on that note, I’m handing across to Minister Chris Bowen.

CHRIS BOWEN: Well, thanks, Sharon. It’s always great to be in Newcastle as a very regular visitor, but it’s even better to be here with such good news. Orica is going green. Green hydrogen. Orica has been on this site for more than 50 years employing over that time thousands of Novacastrians. 

And today what we’re doing is locking in the future of Orica in Newcastle and making sure that Orica can compete in a rapidly decarbonising world, where consumers, investors are demanding to know that big industrial companies like Orica have a plan. And Orica does have a plan. And it’s a plan in partnership with the Australian government.

So today I’m delighted to announce that Orica is the second recipient of our Hydrogen Headstart program. The second and final recipient of round 1 of Hydrogen Headstart. Hydrogen Headstart, which was designed by the Albanese government to work with companies, investors in Australia and help them with the transition. 

And this site, this island, will be the site of a 50 megawatt green hydrogen electrolyser, creating enough green hydrogen to be the equivalent of taking more than 26,000 cars off Australian roads each year, making sure that the products that have been made here for so long will continue to be made here but will be made in a sustainable way. Creating more jobs as we go, but I think most importantly locking in the jobs that have been here for so long.

So this is an important day. As Sharon said, this is a hard-to-abate sector. But the key word is hard – not impossible. We don’t do things because they’re easy. It’s actually tackling the hard things which is the determinant of success. And there’s plenty of people who say, “Oh, green hydrogen is too hard.” There’s plenty of them in politics, there’s plenty of them in the media, sitting like Statler and Waldorf up in the – watching the Muppets criticising everything.

Well, actually, green hydrogen is hard, but not impossible. And it can only be done in partnership. So this partnership between the Albanese government and Orica through ARENA, our world-class energy agency, best in the world, which puts, as I’m sure Sanjeev and his team would be the first to say, puts our partners through their paces to make sure that they’ve done their homework. And when the homework is done we come in, in partnership, in complete and total partnership.

So today, as Sharon said, it’s a great day for the Hunter, a great day for Australia. It shows that green hydrogen does have a future in Australia. Australia is one of few countries in the world that has the capacity to develop a green hydrogen industry big enough for export. And what I’m really excited about, too, is that not only are we looking in the future of Orica here today, but I see Orica as an anchor for other investors to come in around and make future investments in green hydrogen.

I want the Hunter to be a green hydrogen hub. And under our government it will be. Not tomorrow, not next week; it will take time. But hard things and big things don’t happen overnight; they happen with hard work and sweat and patience. What’s what we’ve done so far. That’s what we’ll continue to do. I know Orica will continue to do it.

So I want to thank Sanjeev and his team for your partnership – government and industry working together, understanding each other’s perspectives. That’s what it’s all about. I want to thank Darren Miller and the team at ARENA, as I say, the world’s best renewable energy agency. I want to thank Sharon and Pat, in particular, for your leader locally, always ensuring that the Hunter is at the forefront of every conversation about energy, together with Dan and Meryl, of course.

But this is a good day for Australia and the Hunter. I’m delighted to be here. It's been a long time coming. I think this is – yes, it’s probably my 13th visit to the Hunter. I think it’s my fifth visit to Orica here, or something like that, over the years. But I always enjoy coming because it’s a good Australian company with great plans for the future and great partnerships. So, thank you.

I’m going to hand to my friend and colleague Pat Conroy to say a few words. Then we’ll hear from Sanjeev and Darren and then we’ll take questions.

PAT CONROY: Well, thanks, Chris. It’s a pleasure to be here with you and Sharon and the other representatives, and I want to thank you, Chris, for your strong leadership on this vital topic. 

As Sharon said, the Hunter is proud to be the powerhouse of the nation. For over a century we’ve been the energy and manufacturing powerhouse for the entire country, and I want to take this opportunity to thank all the workers involved who get up every day, and whether it’s keeping the lights on through our power stations or producing the inputs that we need to build a modern economy, that’s delivered in the Hunter. 

And we’re up for the challenge, because we know things have to change. We know that we’re in a global race to transition. We’re in a global race to decarbonise if we’re to meet the climate change goals that are required. And the Hunter is up for that challenge. And I’m really delighted to say that Orica and its workforce are up for that challenge. And that’s why today’s announcement is so important.

That’s why today’s announcement will help the transformation. And here in the Hunter we love big things. And Sanjeev just told me that this project will deliver the biggest electrolyser outside of Europe. So yet again putting Hunter on the map delivering low carbon ammonia that is vital to modern economies, that’s vital to modern manufacturing, that’s vital to feeding the world.

And so for Hunter, businesses like this, for Hunter workers to be at the forefront of that guarantees for generations to come more jobs in our economy, more money in our economy, more ability for families to put food on the table and send their kids to school and live the life that everyone is entitled to.

So I want to thank Chris. I want to thank Orica. I want to thank ARENA for their leadership. But ultimately I want to thank the workers for what you do every day in powering this nation, feeding the world. And today’s a great day for the Hunter and a great day for decarbonisation. Thank you very much.

SANJEEV GANDHI: I will not repeat what’s been said. Thank you all for joining us here today. A very warm welcome, once again, to Minister Bowen, who’s been a frequent visitor and supporter to Orica and to the Kooragang Island site here. 

Obviously Sharon has been, again, a big, big supporter for us. Minister Conroy, thank you - your first visit here. We really appreciate that. And Darren, Darren and Orica, ARENA and Orica have worked for a very long time very closely to come to where we are today. And then obviously Lee from the Hydrogen Council here to represent the industry here.

It's a big day for Orica. It’s a big day for Newcastle. And it is just the commitment of Orica to the Future Made in Australia strategy of the government. We will continue to invest in this site. This site is critical not just for Newcastle but for the country, for the state. And we expect that this is the beginning of many big things that we intend to do going forward.

It’s going to be a hard road. As Minister Bowen said it’s not easy to build these kind of projects. We will need a lot of support from the local authorities, from the state government, from the federal government and obviously from the Orica workforce. 

There’s a lot of competence here. There’s a lot of knowledge here. We’ve been doing what we do for the last 50-plus years, and the expectation is that today we are setting up this particular site, Kooragang Island, for the next 50 to a hundred years.

So exciting times, and we’ll keep you updated on how the project moves forward. Thank you very much.

DARREN MILLER: Thank you, Sanjeev, and thank you Minister Bowen, Pat and Sharon for your kind words as well. Well, we’re here today for a very important reason. The climate needs this to happen. 

We know that ammonia production around the world is responsible for around 2 per cent of global emissions. It’s a critical path that we need to decarbonise. We know that hydrogen is the most likely candidate to do that, and we have the opportunity through hydrogen innovation to help the world decarbonise up to 15 per cent of heavy industrial processes, long distance transports and the like.

So it’s really important that we get to days like today where through all the years of work and experimentation, lab experiments through to commercialisation you can actually build something substantially that will show the pathway for heavy industrial emitters, such as Orica’s facility to take that step forward.

ARENA has been working on this challenge for many years now – up to eight years. We’ve committed over $370 million to around 65 hydrogen projects right from university research all the way through to this very large-scale industrial facility like this today. And it’s wonderful to get this under our belt and declare success on Headstart round 1.

These kinds of things don’t happen by accident. It takes a huge amount of hard work. Companies like Orica, support from the government and industry and, most particularly, people like Alex McIntosh in our ARENA team who leads our hydrogen work to bring this to fruition today.

So I want to thank everybody involved, and with an eye on the future announce that we’re also looking to open consultation for Hydrogen Headstart round 2, effective today. We’ll be talking to the industry to understand what are their projects, what are the challenges, how can we help with further hydrogen projects in Australia. Thank you all very much.

CHRIS BOWEN: Okay, I’ll conduct questions. When you’re in the industrial powerhouse of Australia, you need to speak up, Journos.

JOURNALIST: When can we expect the green hydrogen to be produced here? Is there a time line?

CHRIS BOWEN: Yeah, 2028, but Sanjeev might want to add some more details. But obviously work will start very soon. It doesn’t happen overnight, as I said. But 2028 is the target date. Sanjeev?

SANJEEV GANDHI: Yeah, there are a few conditions we have to go through in terms of – there are still a few things we have to do in terms of lining up renewable energy, lining up recycled water, technology partners. So a lot of work has happened, but there’s a bit more to go. And then we’ll go into FID and the expectation is that during 2028 calendar year we’ll have the first molecules of green hydrogen produced here at this site.

JOURNALIST: From my understanding, green hydrogen uses a lot of hot water.

SANJEEV GANDHI: Yeah.

JOURNALIST: Where is that water coming from? Here? Has there been some modelling done locally?

SANJEEV GANDHI: Yes, it has. The water will come from recycled water sources. So the idea is not to use potable water, obviously, because you don’t want to compete with users of potable water in agriculture and human consumption. 

So we’re going to use industry recycling of water already in place. We have the knowledge and know-how. We’ll work with partners and we’ll ensure that we’ve got renewable energy and recycled water. Those are the two critical factors to make the project successful.

JOURNALIST: Minister Bowen, while we’ve got you here in the Hunter, it’s not going to be a surprise, but we’d like to ask you a few questions about the Hunter offshore wind project. We’ve heard that the partner Equinor is stepping away from projects across Australia. Does this give you any concern at all

CHRIS BOWEN: Well, across the world, Equinor is recalibrating their investment portfolio. It has made decisions to withdraw from projects across the world. As you know, several weeks ago I extended the period for the project, Novacastrian, which is effectively a joint venture between Equinor and Oceanex, to have further discussions with each other commercially about their proposed way forward. I have no update for you, other than I’ve extended the period and they will report back to me when that period is complete, and then I will look at what they’ve come back to me with.

JOURNALIST: So if Equinor doesn’t come to the table, will we get more feasibility licences –

CHRIS BOWEN: Well, you’re jumping the gun a bit. There’s a process. I’ve given them more time. That was the reasonable and responsible and sensible thing to do. They’re taking that time, they’re working it through. 

This is a great opportunity for Newcastle and the Hunter creating lots of jobs, creating lots of energy, separate to this project, but also, I think both projects show the potential for Newcastle to be a renewable energy powerhouse. But, as I said before, none of this is easy. And around the world offshore wind projects are running into headwinds. 

No question about that. I’ve always been upfront about that. Australia is not immune from that. But as I said before in relation to this, just because something’s hard doesn’t mean it’s too hard. We’ll keep working with the sector and when the joint proponents come back to me with the results of their commercial conversations, then I’ll make further announcements.

JOURNALIST: Sure. And there seems to be a little bit of resistance not just here in the Hunter but across the state down in the Illawarra. Have you been in discussions with BlueFloat at all? We’ve heard they’re also considering withdrawing from the Illawarra project?

CHRIS BOWEN: Well, BlueFloat has interests both in Gippsland and the Illawarra. Again, companies are going to make different investment decisions from time to time. There’s also other companies that are very much interested in coming into Australia. So let that process work through a little bit. Again, offshore wind has always been targeted at around that 2030 period. So there’s a little bit of time to work it through. 

It’s not like we were planning on construction this year or next year anyway. There’s a little bit of water to go under the bridge, to coin a phrase. There’ll be controversies on all sides, I’m used to that. The Illawarra and Hunter and elsewhere, again, I think the Australian people told the Albanese government to get on with the job. 

The people of the Hunter told the Albanese government to get on with the job a few weeks ago with very strong results for Labor candidates in the Hunter. And they told us keep going, guys. That’s what we intend to do.

I’ll be a bit fair to others and I’ll come back to you.

JOURNALIST: What’s the size of the investment in Headspace of the government?

CHRIS BOWEN: Headstart you mean?

JOURNALIST: Headstart, sorry.

CHRIS BOWEN: Headspace is a very different project. 432 million.

JOURNALIST: Just a quick question from the press gallery from Sky News, you touched on it earlier. Annastacia Palaszczuk said earlier this week that green hydrogen doesn’t financially stack up right now. It’s in the too-hard basket. Do you agree with her or do you think she’s wrong?

CHRIS BOWEN: Well, here we are today. I think it’s in the hard basket, not the too-hard basket. You know –

JOURNALIST: Do you think she’s wrong?

CHRIS BOWEN: Well, I’m answering your question. If you ask a question and give me a chance to answer it, I will. It’s in the hard basket. But we don’t put things in the hard basket and then ignore them. We put things in the hard basket and work on them together. There’ll be setbacks. There’ll be headwinds. 

The Gladstone project is not proceeding. I’m disappoint about that. It’s not proceeding because the Queensland state government has withdrawn. The private sector was very interested and wanting to proceed. The private sector investors are very disappointed that Gladstone is not proceeding. The state government of Queensland took a decision to withdraw. A matter for them. Disappointing. Gladstone will miss out on a lot of jobs as a result. Newcastle won’t miss out on a lot of jobs. Newcastle is getting this investment for the future.

JOURNALIST: I’ll go back to the offshore wind farm, again, if you don’t mind. So there seems to be kind of this resistance from investors, as we’ve discussed already. Earlier, a couple of years ago, they seemed pretty keen. What’s changed? What’s going on? Do you have any idea of why they might be reconsidering?

CHRIS BOWEN: As I said, around the world, partly as a result of decisions by other governments around the world and changing economic conditions, projects will go up and down lists of priorities from big, major international investors. There’s still a lot of interest. 

We’ve got 12 licence applications for Gippsland, for example, that are working through the system. We had more than 12, I chose 12. Out of more than 30 applicants, that’s managing strength. But every zone will be different. In Western Australia we’ve had four applicants for a much smaller zone, of which I’ve chosen three to proceed in some form.

Again, every zone is different. And every zone has different economics. We’ll work those issues through in partnership with the sector. There’ll be projects which proceed faster or slower from time to time between now and the 2040s, or over the 2030s as these projects get built. That’s just the nature of the economics of wind and when you’re engineering a big economic change.

JOURNALIST: And do you think the calls coming out of the US, a great major player, Trump saying drill, baby, drill, the expansion of fossil fuel projects over there is that having an impact here on new projects like this, like the offshore wind farm?

CHRIS BOWEN: All sorts of things have different impacts. Australia is open for business for renewable energy investment. And if other countries are declining that investment they’re welcome here.

JOURNALIST: Last question for you from me, I promise. So can I get confirmation from you you’re confident that both the Hunter and the Illawarra offshore wind farms are going to proceed?

CHRIS BOWEN: I’m confident that we’ll keep working together with the sector for good outcomes for the people of both regions again, as the regions’ voters asked us to do two months or so ago, keep going, guys, they said. Well, message received. We intend to.

JOURNALIST: Chris, why Orica? Why were they chosen [indistinct]? Why were Orica chosen over other –

CHRIS BOWEN: Because they had an excellent proposal which went through rigorous analysis and was recommended to me by the ARENA board. That’s why.

JOURNALIST: How much is green hydrogen going to make up of the output going forward? I mean, is it going to –

CHRIS BOWEN: Do you want to answer that, Sanjeev?

SANJEEV GANDHI: So the first phase of what we’re talking about here today – 50 megawatt power – that’s seven and a half per cent replacement of the gas demand that we have on this site. Phase 1. And if we’re able to scale that up, show proof of concept, make it successful, scale it up, we’ll slowly, gradually but surely start to produce [indistinct] gas and start to feed in more and more green and renewable hydrogen into the system here. 

What that also does for us obviously is that the frees up gas for domestic consumption in Australia, no longer for industrial use but for domestic use for heating and whatever else that we need the gas for. The challenge is that we still continue to need gas as a condition fuel until we reach 100 per cent self-sufficiency in terms of hydrogen. 

That will not happen overnight. So it’s going to be a journey, a long journey, a challenging and difficult journey. But with the support of the government, the federal government, the state governments and ARENA, we feel pretty confident that we’ll get there with phase 1 and then we’ll take it from there.

CHRIS BOWEN: And that 7 per cent is equivalent to the 26,000 cars I referred to before. So we’re not talking small amounts. This is a long transition, as Sanjeev said, but we’re well on the way.

Okay, I think that might be a wrap.