Press conference with Sharon Claydon MP - Kooragang Island, Newcastle

SHARON CLAYDON: Good morning, everyone. Thanks for being here. My name's Sharon Claydon, Federal Member for Newcastle, a very, very proud Federal Member for Newcastle on a day where we have another extraordinary announcement that really brings both the private sector and government together to do some very serious lifting, not only about reducing emissions, but being at the forefront of production of green renewable hydrogen for Australia. I'll leave the details   we've just had a terrific tour of the Orica Plant here on Kooragang Island.

I'm joined today by our Minister for Climate Change and Energy, Chris Bowen, who's going to make some announcements, and of course our CEO for Orica and Origin who are the two incredibly important industry partners showing great leadership and great collaboration with government to do, as I said, some of the serious heavy lifting that we need to do now in Australia. Over to you, Minister Bowen.

CHRIS BOWEN: Thanks very much, Sharon. Well, industry and government working together is what will see Australia create jobs and reduce emissions, and today I'm very pleased to be here to announce with Frank and with Sanjeev a collaboration which will see Newcastle and the Hunter amongst the first cities in the world to be producing commercial quantities of green hydrogen.

Today we're announcing that Newcastle will be the first hydrogen hub in Australia, and we're announcing $70 million of funding from the Albanese Government to Origin Energy to enable the development of a green hydrogen facility right here in Newcastle, right here where we're standing, and also I'm very pleased that Origin and Orica have entered into a partnership to see that green hydrogen help Orica decarbonise this very important plant.

Australia has a great industrial future. Australia will always be a country that makes things, but increasingly under our government, we'll make things in a way which is decarbonised, which is fulfilling our responsibilities to reduce our carbon emissions.

But the future is not to see us making fewer things, the future is to see us making more things, and to do it in an environmentally conscious way.

The government will not do this alone. Industry will not do this alone. We will do it together. Under our government we have put obligations on our biggest emitters under our safeguard reforms. We want to see emissions come down. We require emissions to come down. But we also partner with industry to help those emissions come down. It's about creating the certainty for industry to get on with the job, make sure the rules are clear, but also then to work in partnership, and that's exactly what has happened today.

So this has been a big couple of days for the Hunter. Yesterday, of course, I declared the Hunter offshore wind zone, the second in Australia. It will be enough power coming out of that to power 4 million homes, it will create thousands of jobs, and today, after yesterday, hosting Australia's second offshore wind zone, announcing that the Hunter will host our first hydrogen hub.

As I've said before, the Hunter has powered Australia for many generations, it will power Australia for many generations to come. That power will change. Industrial settings will change. But the Hunter will always be important to how we make energy and use energy in Australia, and importantly, the Port of Newcastle will be important as to how we interact with the world and export renewable energy to the world.

So this has been a very, very important couple of days for the Hunter, a very important couple of days for Australia's industrial and energy future. I'm very pleased to be here to announce this $70 million of Federal Government funding today to work with two Australian companies, Origin and Orica, to see us leading the world, and to see Newcastle leading the world in the race, and it is a race, for green hydrogen.

I'm going to ask Frank, the CEO of Origin to say a few words, then Sanjeev, the CEO of Orica, and then I'll take easy questions and Frank Calabria will take hard questions. Thank you very much.

FRANK CALABRIA: Thank you very much, Minister. Firstly, what I want to thank is the Federal Government, to Minister Bowen and his government for the $70 million funding that's been announced today. We really very much welcome that support by the Federal Government.

The first thing is that if we're going to achieve our decarbonisation goals in Australia, then hydrogen's going to play an important part, and particularly in the areas of difficult to abate emissions and in manufacturing, and you're seeing a fine example of this through the work we're working with both Orica and Federal Government today.

Origin has an ambition to lead the energy transition through the acceleration of renewable and cleaner energy, and when it comes to cleaner energy, hydrogen will be part of that, and it will require, as the Minister says, for us as industry to work with government more broadly to achieve those goals and to stimulate that growth.

Today we are on the cusp of working through a project that delivers 55 megawatts and produces 5,500 tonnes of hydrogen, which is a great step forward and a scaled step up for the industry.

We're going to learn a lot through this project, and we really are very excited to be on the path with Orica and the government, and we're also very excited to see what the future holds for hydrogen more broadly. This is an important step forward for us as an organisation, but also what can be achieved with government and industry working together.

So thank you very much, and I'll now hand you over to Sanjeev.

SANJEEV GANDHI: Let me start by welcoming all our guests today, a special honour to have Minister Bowen, and obviously Frank, a very important partner.

Today is a very important day for Kooragang Island and for Orica. As of yesterday, we have physically eliminated the emissions of more than 600 tonnes of CO2, and that's a huge step to future proof this site and to continue on our journey to decarbonise Orica.

It could not have been done without the support of the government, the Safeguard Mechanism was a very, very important instrument that has encouraged us. We're going to take this initiative now and move to our next big manufacturing site in Australia, which is Queensland, and we'll do exactly what you've done here.

We intend to further eliminate more than 200,000 tonnes of CO2 out of the Queensland manufacturing site for Ammonium Nitrate.

Orica makes extremely critical products for the mining industry, for the resource industry as well as for the food industry, the fertiliser industry. What we are doing today is future proofing the site, creating new jobs, creating new skills, and obviously the most exciting future for Kooragang Island is going to be the hydrogen hub.

We're working very, very closely with Origin and the Port of Newcastle and with the support of the New South Wales Government as well as the Federal Government, I feel pretty confident that we'll be one of the first movers in terms of manufacturing green hydrogen in this country.

So exciting times for Orica, exciting times for Australia, and I'm looking forward to a very bright future. Thank you, all.

CHRIS BOWEN: Thanks, Sanjeev.

JOURNALIST: Just to begin, can you talk us through the uses of the hydrogen?

CHRIS BOWEN: Well, Sanjeev might want to add to the uses of the hydrogen, but in this particular instance, but this green hydrogen will in large part power this plant and replace fossil fuel gas. This is a big deal. As I said, the world is moving to green hydrogen, but there's a race on, and Orica and Origin will be amongst the first companies in the world using green hydrogen, and Newcastle will be amongst the first cities in the world commercially producing green hydrogen.

Ultimately green hydrogen is a form of energy storage. You take renewable energy, and you store it in green hydrogen, you can save it for when the grid needs it, and ultimately, after further scientific developments and commercial developments, you'll be able to export it on ships through various mechanisms.

But in the first instance, we're building an Australian domestic green hydrogen industry to then grow into an export industry. But Sanjeev, do you want to add to that?

SANJEEV GANDHI: I think, Minister, you nailed it. There are obviously quite a few applications of green hydrogen as an energy source. The biggest potential is to replace the consumption of natural gas in manufacturing of chemical products, and this particular site is one of the large consumers of gas in New South Wales, so we intend to take a portion of the green hydrogen and replace the gas demand on the site. The rest obviously through Origin our partners but then going to the transport sector, and then as the demand continues to pick up, we continue to skill that capacity up as well.

JOURNALIST: Will it replace about 7 per cent of the natural gas?

SANJEEV GANDHI: In Phase 1 it will, yes.

JOURNALIST: And at the moment you're using about 15 per cent of the State's gas, is that right?

SANJEEV GANDHI: That's correct, that's correct.

JOURNALIST: What's the timeline on this project?

CHRIS BOWEN: We expect to see production by 2026.

JOURNALIST: Can you talk us through the difference between the Port's Green Energy Precinct, can you talk us through the difference between this announcement and the Port's Green Energy Precinct?

CHRIS BOWEN: Well, they are different things, but there's more to do. The Port under Craig Carmody's leadership is, again, making sure that Newcastle is a leader in clean energy, and yesterday Newcastle, the Port of Newcastle signed around 25 MOUs with partners and friends from Japan and Korea, some of whom are here today, whom I welcome.

That's about the future of the Port, this is about the future of Orica here in Newcastle. So they're complementary projects, but quite different in their scope.

JOURNALIST: With the timeline, is it going to take   is there any steps you have to take before construction starts? Is that why it's not starting till 2026?

CHRIS BOWEN: One of these guys [indistinct] actually going to build it.

SANJEEV GANDHI: We are in the process of finalising our feasibility studies. Next step would be to start ordering long lead item and equipment that particulars 12 to 24 months, and then after that it's going to be FID, which we hopefully do pretty quickly now that the Minister's given us all the encouragement we need, and then commercial production as the Minister said will be in 2026.

JOURNALIST: The 70 million for a specific component of the plant, but you guys will have to put in money from your companies to develop it as well?

FRANK CALABRIA: Yeah, that's right. So there will be funding from the Federal Government, we're also in discussions with the State Government, and then there would be funding provided by Origin and Orica, and we just   we're going through what they call front end engineering and design, and so clearly, the whole design of that plant, and we're working really closely with Orica on that design, and that's where the lead items and that activity, and that will then bring us to a decision for final investment decision, and that will be a key milestone.

JOURNALIST: Do you have an idea of the total cost of what it would be?

FRANK CALABRIA: Not at this stage. I mean there are ranges of costs, but clearly the team are out there now in a world where, as you know, there's inflation, inflationary pressures, but they're out there getting costings at the moment. So a bit early for us to [indistinct].

JOURNALIST: Can you provide more detail on how the hydrogen could be used in the transport industry?

FRANK CALABRIA: The immediate use case, and the partners we've been working with on this, is actually in terms of bus transport, because it tends to be heavy vehicle transport, and those refuelling stations that is the first use application, and we've had good support from a local bus provider, and they're involved as another one of the use cases here. But overwhelmingly the majority of the hydrogen here will be used for Orica, production of ammonia.

JOURNALIST: So can we expect to see hydrogen powered Keolis-Downer buses at the Newcastle network?

FRANK CALABRIA: We're working currently Red Bus at the moment, so we'll have more to say as we make progress with the transport system, but we do see, as you know, the evolution of decarbonised transport more broadly is going to be upon us, and there will have to be both heavy vehicle and light vehicle application. As you know in light vehicle, it's largely electrification, but in heavy vehicle applications, hydrogen's got a role to play.

JOURNALIST: And in terms of phases, this is Phase 1, I understand that there's at least two more phases which will bring in clean energy precinct as well. What are your ambitions for producing hydrogen?

FRANK CALABRIA: Certainly got big ambitions, and what we need to do is to get this industry started, and that's why this is an important step. It's a step up in scale, and we'll also, in terms of those skills and capabilities and jobs, and everything that comes with that, and opportunities I think working locally with the community, we certainly have much bigger ambitions, but it's a bit early to say that right now. Our focus is very much on successfully executing the first phase.

JOURNALIST: Minister   sorry.

JOURNALIST: Sorry, Minister, my question is just for my colleagues in Canberra. But Peter Dutton says the next RBA Governor, if he is a departmental secretary, they won't be independent from the government. Does he have a point?

CHRIS BOWEN: That's an insult to departmental people. I'm not going to speculate on the Reserve Bank Governor appointment. Mr Dutton should respect that whoever is RBA Governor at any given time will be governing themselves with all rigour and independence that other Governors have. I think Mr Dutton should reflect on his comments.

JOURNALIST: Just some questions about the offshore wind plant. There was an academic report yesterday which said that wind was going to be critical to Australia's energy future, but also questioned whether it was viable off the New South Wales coast due to costs. What do you say to that report?

CHRIS BOWEN: Well, in terms of viability, there's plenty of proponents who would beg to differ, who are about to put in expressions of interest, and be competing for the spots in the Hunter offshore wind zone, and the best bids will win. So we are being overwhelmed with interest on offshore wind. There's not an offshore wind company in the world that isn't looking to Australia as one of their key markets for development. So they think it's viable, the government thinks it's viable, and it will be viable.

JOURNALIST: Are you expecting proponents who miss out on Gippsland to be applying for the Hunter?

CHRIS BOWEN: That's distinctly possible, but I also expect proponents who are successful in Gippsland to be applying for Hunter as well, because there is so much to do, these companies are getting on with the job and are not limiting themselves to one particular zone.

JOURNALIST: Today's just the beginning. How do you see hydrogen use in the future in the Hunter, you know, where do we go from here?

CHRIS BOWEN: That's a hundred per cent right. This is Stage 1 of one project. I mean hydrogen will be absolutely central to Newcastle's future, and Frank's right, the transport, hydrogen will mainly be used for heavy vehicles, trucks and buses. There are hydrogen cars too, but mainly trucks and buses, in due course aviation, green hydrogen will play a big role in decarbonising aviation.

So all this is before us, and if Hunter is in early, then the world's your oyster. I mean you can really consider any vision for green hydrogen, and if Hunter is one of the first cities or regions in the country, indeed the world, adopting it, then all those opportunities are available for green hydrogen production right here in Newcastle.

JOURNALIST: I'll just ask one more question on wind. I've spoken to some proponents this morning who said that the 260-metre height limit was a little bit concerning because it wouldn't allow them to use the latest technology in seven or eight years' time. The wind turbines could be much bigger than that by then. What do you say to that?

CHRIS BOWEN: I'm sure the proponents will work, as I'm sure they've said to you, even if they would like a bigger area or less restrictions, they will work with the rules the government's put out. This is all about striking the right balance. There will be some people who will say the area I declared yesterday is too small. I don't make any apologies for that, because we work with communities and take into community feedback. A 1,800-kilometre area is enough for plenty of offshore wind zones. The height restriction was put on for Defence-related purposes, for reasons, which, you know, I probably don't need to explain in relation to the Hunter's importance to Australia's air defences, while I understand, you know, competing interests, the defence of the nation will always be one of our key considerations.

JOURNALIST: Final question from me, Minister. Where are you at with [inaudible] on the fuel emissions standing?

CHRIS BOWEN: As we've said, we'll be making further announcements quite soon with a view to having legislation this year.

JOURNALIST: Do you expect to be back in the Hunter any time soon to make more clean energy announcements?

CHRIS BOWEN: Yeah. I mean the Deputy Lord Mayor has told me I'm getting honorary citizenship because I'm here so often, so yes, I will be back to make more announcements. I'm here quite a lot, 'cause there's a lot to do. We wasted a decade, and now there's not a second to waste. All right. All in, all done. Thank you.