The federal government has signed off on an agreement to pump $70 million into the Hunter's first commercial hydrogen manufacturing hub.
Climate Change and Energy Minister Chris Bowen will announce on Thursday that the government has finalised an agreement with Orica and Origin Energy to help fund a 55-megawatt hydrogen electrolyser.
The Hunter Valley Hydrogen Hub's capacity is five times bigger than any other hydrogen electrolyser at final investment decision stage in Australia.
Mr Bowen told the Newcastle Herald on Wednesday that demand for hydrogen around the world was "massive".
"I was talking yesterday to the Prime Minister, who's in Berlin. He said you wouldn't believe the amount of interest in Germany in buying our hydrogen," he said.
"They're all over it, so it's absolutely key for our future."
The government has committed $100 million towards infrastructure to develop a hydrogen export hub in Newcastle and had allocated another $41 million each for two hydrogen production plants.
Macquarie Capital withdrew from its hydrogen joint venture with Port of Newcastle last year, and some of its funding allocation has shifted to the Orica-Origin plant.
The factory will make up to 5500 tonnes of renewable "green" hydrogen a year and employ about 100 people.
Orica will use most of the hydrogen at its ammonia and ammonium nitrate plant on Kooragang Island, but some will help refuel hydrogen buses and trucks.
The project will also help develop an export industry.
"This project is the next step towards using locally produced renewable hydrogen in Australia to reduce our industrial emissions and develop a renewable export future," Mr Bowen said.
Orica and Origin plan to start building the plant in 2025 and launch production the following year.
Mr Bowen was at a news conference in Newcastle on Wednesday to declare the nation's second offshore wind zone off the Hunter coast and to congratulate Port of Newcastle on securing agreements with 15 Australian and international companies on progressing the proposed Newcastle clean energy precinct.
Hydrogen will form a central part of the energy precinct, which has attracted memorandums of understanding with large Asian firms such as Japan's Mitsubishi Heavy Industries and Korean energy company KEPCO.
"Hydrogen is one of the key ways we'll store and export renewable energy," Mr Bowen said.
"You can't export electricity through batteries, but you can export it through hydrogen. You can store it and, ultimately, not yet, put it on ships and export it.
"The port agreements are a demonstration that everyone gets it. These guys are here from Korea and Japan, a focus for exports in the past and a focus for the future."
Mr Bowen told Wednesday's media conference that the port had put the government's $100 million commitment "to good use" by securing interest from local and overseas players in the renewable energy industry.
"We have friends here from Japan and Korea who have travelled so far to recognise that Australia has always been a key energy partner and will always be one, particularly when it comes to renewable energy."
