Interview with 2HD Newcastle with Richard King

RICHARD KING, HOST: In the news, Orica has committed to building a green hydrogen plant in Newcastle, costing almost $400 million in a move that certainly goes against the trend on a fuel that, well, a lot of others are pulling back from, and as I understand it Origin was originally the lead on this particular project, but they bailed back in 2024 because of the high production costs of this green energy. But now Orica, the world's largest provider of commercial explosives, they're expected to spend hundreds of millions of dollars on this, and somebody who's very happy about it is our Energy Minister, Tim Ayres, who's on the line. Good morning, Tim.

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION, MINISTER FOR SCIENCE: Oh, g'day, Richard, really good to be on the show.  Now, I don't want the Energy Minister to get upset, I'm the Industry Minister –

HOST: Oh okay, yeah, yeah, yeah, I do apologise, you’re the Industry Minister – look, actually, before we get on to that, I have spoken to you in the past about this new labelling for seafood, which came into effect yesterday. What happens – I mean, if I go to a shop and buy food and there's no country of origin labelling, can I dob them in? Are there penalties here, or is there a grace period for retailers and restaurants and pubs and clubs, et cetera?

AYRES: Well, first thing’s first, Richard. The seafood country of origin labelling laws, as you know – right now, if you go into the supermarket or go down to the co‑op in Newcastle and buy fish, it's all labelled; is it from Australia or New Zealand or China or Vietnam. That has been the case for some years. There's been a gap here though for restaurants, there's been no requirement for restaurants to tell you where the seafood is coming from. And that matters. There's 14,000 Aussies, mostly in regional towns, you know, coastal towns, working in fishing fleets, working in fish processing, whose jobs rely upon the seafood industry. 

I think Australians really want to buy Australian seafood too. It's really high quality seafood. So, we've introduced, with all of the States, a really simple mechanism, really simple rules that mean that on the menu, all the restaurant or pub's got to say is, is it from Australia, is it imported, or is it mixed origin? Like, a marinara might come from all over the world, right? 

HOST: Yes. 

AYRES: So, we've made it really simple so it's straightforward for pubs and clubs and restaurants to provide it. 

HOST: Okay. So as of – 

AYRES: Those laws came into effect yesterday. 

HOST: Right. 

AYRES: Right across the country.  Now, I don't want you making a citizen's arrest here, Richard –

 HOST: Right. 

AYRES: – when they haven't got it on the menu, but each State will have its own processes, like they are managing this work in conjunction with the Commonwealth. I reckon the right thing to do is just politely ask the restaurant owner where the seafood comes from, ask them if they're going to put it on the menu.

They'll be scrambling to comply with the new requirements, even though we've had this out there for a couple of years now, everybody's known it's coming along. It's really just another way the Albanese Government is working to back Australian jobs here and Australian processing, in this case in the seafood industry, and as I said I reckon most Australians care about where their seafood comes from, and they want to buy the local product, if they can.

HOST: Hear, hear, okay. Coming up to 21 to 7, my guest, Tim Ayres, our Industry Minister, on the subject of the announcement yesterday by Orica that they'll be leading the nation in renewable energy transmission after the company locked in plans to build the country's – well, flagship green hydrogen hub. I might add Origin pulled out of this project a couple of years ago because it wasn't commercially viable.

Just explain how this is actually going to happen, Tim, because as I understand it, if it wasn't for the injection of Federal funds, ie taxpayers' money, this wouldn't be happening, is that correct?

AYRES: Well, it's certainly been foundational for securing this 50 Megawatt facility on Kooragang Island, so it is a significant contribution from the Commonwealth in the Hydrogen Headstart program.

Orica, of course, are putting in hundreds of millions of dollars themselves, and there's around 250 staff work in and around this facility; engineering trades people, you know, experts, production workers there as part of what I call the Hunter mining-industrial complex. This is a facility that is there producing ammonium nitrate for mining explosives, so it's a core part of our mining supply chain.

What this investment does is secure this hydrogen production here in the Hunter Valley, and right around the world countries are competing now, particularly in the role of hydrogen in ammonia production, and we are determined to make sure that The Hunter is at the front of the queue.

HOST: Right.

AYRES: And if this investment happens here, it's an important brick in the wall of building the future industrial economy, and I want it to be built here in the Hunter.

HOST: Okay. As I understand it, for it to be labelled green hydrogen you've got – I mean, you need a lot of energy to, you know, produce hydrogen, and as I understand it, it's got to come from renewable energy, so that's obviously – where does it come from for Orica? Where are they getting their renewable energy from?

AYRES: Well, Orica will be sourcing power purchasing agreements that underwrite generation in wind and solar and storage. You know, these developments are really important for the future of industrial electricity for this facility, but also for facilities that – like Tomago Aluminium, for example – that use an enormous amount of power.

But the new industrial economy, the new industrial technologies are more and more focused on electricity as a power source. All of our industrial processes use a lot of energy. The shift that's going on around the world is, where it's achievable, firms are moving from coal to gas, from gas to electricity.

Gas is going to continue to play an important foundational role in Australian industrial processing ‑‑

HOST: Well, certainly ‑‑

AYRES: – why we're reserving gas for Australian industry this year.

HOST: And Orica use a bucket load of gas, and as I understand it, with this hydrogen plant, they'll only use what, I think 7.5 per cent less of their gas, which doesn't sound like a lot.

AYRES: Well, they use a lot of gas, so we're investing in this capability, hydrogen here, but also we are determined to deliver a more competitive future for Australian industry by the Albanese Government's Gas Reservation Scheme. It imposes a heavy obligation on our gas industry to reserve 20 per cent of Australian gas for Australian industry, that's reducing the costs for gas and making gas a key part of our future energy, resilience and energy security. We're backing gas for the industrial economy, we're backing this process because hydrogen's important now, but it will become more and more important over time, and I just don't want Australia to be left behind.

HOST: Right. 

AYRES: This is not, you know, there is no one answer to this set of industrial and energy challenges. The Future Made in Australia strategy that I'm charged with leading on behalf of the Albanese Government is about making sure we pull every lever for Australian industry to reindustrialise the economy, and this is an important investment to achieve that. 

HOST: Right. Look, John has emailed in, and this is just a moment ago, he says, "Richard, in regards to this green hydrogen project by Orica, it sounds like a fantastic idea from Orica. In order for this to happen, the Federal Government puts in $432 million". I mean would this be happening were it not the injection of taxpayer fund here? I mean would this thing go ahead if you weren't going to put in $432 million? 

AYRES: Well, I'm sure that it wouldn't go ahead. 

HOST: Right. 

AYRES: And what this does is, yes, it's investment in this new technology, but what needs to happen here to secure future capability is investments like this. Absent this investment, of course, the plant becomes less competitive, you know. You're on the downhill slope instead of the uphill slope. 

What this investment does is mean more capital investment, it secures the facility for longer and longer. You know, each time a plant undertakes these kind of capital upgrades, it leads to more capability, a more secure future, and builds confidence in the region, the industrial capability of the region. In industrial terms, you either go backwards or you go forwards, there's no standing still. 

HOST: Right. 

AYRES: And Future Made in Australia is about, you know – yes, there are public contributions here, but it's making sure there are private contributions, too. Orica will be investing hundreds of millions of dollars of their own money in this project, workers at the plant, 250 skilled trades people and engineers are throwing themselves at this work, it's delivering for Australia, but it's delivering for the Hunter Valley too. 

You know, we are – the only way we chart a way forward in industrial terms is if it's government and business, unions, the community all working together. The Hunter Valley's got such a proud tradition of doing that. We've picked ourselves up off the map after BHP closed. We've got new defence investments led by Pat Conroy in missile manufacturing, in new engineering capability. We're working hard to secure the future of the Tomago Aluminium facility as well. 

HOST: And well actually – 

AYRES: Every single lever we can pull to reindustrialise this economy we are working hard on. 

HOST: And where's that up to, the future of Tomago? I know every time I speak to somebody from the State Government they say, "Well, look, we're still trying to work out how much the Federal Government wants in this sort of joint, you know, bailout for Tomago", and of course everybody points out that the larger shareholder is Rio Tinto, a very profitable company, and some people say, "Well, how come we're having to bail out Rio Tinto?" Where's that up to, the negotiations re the future of Tomago beyond 2028? 

AYRES: Well, I'll be very disciplined about my commentary about discussions with New South Wales because they are commercial‑in‑confidence discussions, they are very detailed and very complex, and we're working hard, including working hard this week, to deliver the right outcome. 

The best way of explaining this, I think, is to point to what we delivered in Queensland. The Albanese Government and the Crisafulli Government in Queensland at the Boyne Aluminium Smelter, which is a little bit smaller than the Tomago facility, and a little bit older, we invested a billion dollars – 

HOST: And the Queensland Government – 

AYRES: – and the State Government there invested $1 billion dollars themselves. 

HOST: A billion dollars, yeah. 

AYRES: So, a shared equal commitment to the future of the facility. Because we've done that, Rio Tinto as part of that deal invested $7.5 billion in new power generation in Queensland and new transmission. 

HOST: Right.

AYRES: So that investment is really important for that facility, but it's dragging through investment in new generation in Queensland, which of course lowers costs in the electricity system – 

HOST: Right. 

AYRES: – for Queensland businesses and Queensland households. So, it makes the Queensland economy more productive, more efficient, drives down costs, like it's an economic slam dunk for Queensland.  

HOST: An economic slam dunk. Thank you very much for your time this morning, Tim. As always good to talk to you and we'll certainly stay in touch but appreciate your time. Enjoy the rest of your Thursday. 

AYRES: Thanks Richard. See you later.