Case Studies

Leading the way. Emissions reduction through one of Australia’s largest industrial decarbonisation projects

As the world’s leading provider of commercial explosives and innovative blasting systems, Orica is moving forward ambitiously on the decarbonisation required for the transition to a net zero economy.

Orica’s target is to reduce scope 1 and 2 emissions by at least 45 per cent by 2030 (on 2019 levels), on our path towards achieving our ambition for net zero emissions by 2050. It’s a difficult challenge, but one we are taking on with disciplined investment, strategic partnerships, new technologies, leadership and determination. 

A key focus of our decarbonisation strategy is deploying cutting-edge tertiary catalyst abatement technology to reduce nitrous oxide emissions, a greenhouse gas (GHG) that is 265 times more potent than carbon dioxide and a by-product of producing nitric acid for explosives. Orica operates nine nitric acid plants at four manufacturing facilities globally, which account for half of our scope 1 and 2 operational emissions, and the largest of these facilities is Kooragang Island on the east coast of Australia.

Deploying innovative, low-emissions technology in an Australian-first
Tertiary catalyst abatement is a proven emissions reduction technology that has been successfully deployed previously, including at Orica’s Carseland site in Canada.

In an Australian first, the $37M Kooragang Island Decarbonisation Project is a public-private partnership between strategic partners including the NSW Government and the Australian Government’s Clean Energy Finance Corporation and to date, has abated 104,424 tCO2-e2. This reduces site emissions by 45 per cent and Australia’s total chemical industrial sector emissions by 11 per cent1, making it one of the largest industrial decarbonisation projects in the country.

The technology works much like a catalytic converter and exhaust system in a car, destroying combustion emissions and protecting air quality, and is achieving 95 per cent nitrous oxide abatement, from unabated levels.

In addition, the ammonium nitrate products we deliver to our mining customers are almost 50 per cent less emissions intensive than those we currently offer, helping to reduce their value chain (scope 3) emissions. 
Stakeholders in the project included the federal and state governments with Chris Bowen, Federal Minister for Climate Change and Energy and Penny Sharpe, NSW Minister for Climate Change, Energy and the Environment, visiting the Orica Kooragang Island site to acknowledge the success of the project, of which the site's Community Reference Group were very supportive. Approximately AUD $21m was spent on equipment and services in the country as part of the completion of this project.

This year, Orica commenced deployment of the tertiary catalyst abatement at our Yarwun manufacturing facility in Queensland. This is estimated to reduce scope 1 emissions from the site by 200,000 tCO2-e per year and avoid a total of 1.5 MtCO2-e by 2030.    

Orica has a proud 150-year history of innovation that has improved productivity and safety and continues delivering smarter, safer – and more sustainable – solutions for the world’s mining sector. The Kooragang Island Decarbonisation Project demonstrates how strong collaboration between industry and government can lead to rapid, large-scale decarbonisation in hard-to-abate industries. Our hope is that it also inspires and encourages more manufacturers to strive towards ambitious sustainability targets.

1Based off the Department of Climate Change, Energy, the Environment and Water’s National Greenhouse Gas Inventory Quarterly Update: June 2023, https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-gas-inventory-quarterly-update-june-2023
2Between July 2022 and June 2023

Sustainability-linked loans to incentivise our sustainability performance

Sustainability-linked loans (SLLs) provide a financial incentive for companies to achieve their sustainability commitments and improve their sustainability performance. They do this by measuring progress against key performance indicators. If agreed targets are met, lenders reward companies with discounts on their loan margin (that is, the cost of capital). If targets aren’t met, penalties apply.

In FY2022, Orica converted $1.3 billion of existing bank debt facilities to SLLs, becoming one of the first hard to abate heavy manufacturers to commit to this approach. The key sustainability performance indicators under the SLLs are:

  • reducing Scope 1 and Scope 2 greenhouse gas emissions
  • reducing potable water intensity; and
  • increasing representation of women in senior leadership

We have focused on those areas where we can make a meaningful impact and have set ambitious performance targets and indicators that are aligned to Orica’s public commitments. This means that improving our sustainability is embedded into the way that Orica does business every day and that all of our executives are aligned in meeting our targets.

Importantly, our focus goes beyond emissions and climate change to prioritise our management of water, which is vital for the continued health and wellbeing of the communities and ecosystems we operate in. Increasing the representation of women in senior leadership has also been identified as critical to Orica’s success and a success measure of our ongoing efforts to foster a diverse, equitable and inclusive culture.

Supporting Orica with this transaction were The Hongkong and Shanghai Banking Corporation Limited, Sydney Branch and Westpac Banking Corporation as Lead Sustainability Coordinators, and Australia and New Zealand Banking Group Limited and The Commonwealth Bank of Australia as Co-Lead Sustainability Coordinators. The transaction is aligned with the Sustainability-Linked Loan Principles (SLLP) and was supported with an independent second-party opinion.

Download the case study here.

New technologies and partnerships to reduce our carbon footprint

As an energy intensive business, achieving our target of being fully powered by renewables by 2040 will require significant effort and a two-pronged approach. Orica is identifying reliable, renewable energy sources that are available now, while also investing in the research and development of new technologies with the potential to reduce emissions in the future.

In 2022, we signed a Power Purchase Agreement (PPA) with Lightsource bp for renewable electricity generated by its Wellington North solar farm in New South Wales (NSW), Australia. The solar farm is anticipated to supply around 50 per cent of our Australian electricity needs which will reduce Orica’s global Scope 2 emissions by over 60,000 metric tonnes of carbon emissions annually. This is equivalent to the power used by 19,000 NSW residences in a year. Once Wellington North is fully operational by its target delivery date of 2025, we estimate that around 30 per cent of the electricity Orica uses globally will come from renewables. 

Looking to the future, Orica has formalised two partnerships in our Australian manufacturing regions to develop and deploy renewable hydrogen and low carbon ammonia technologies for hard to abate sectors.

The first is a partnership with Origin Energy to develop a renewable hydrogen production facility on Kooragang Island in Newcastle, NSW (the Hunter Valley Hydrogen Hub). Hydrogen is essential to making ammonia, which in turn is essential to manufacturing explosives. Right now, hydrogen is derived from natural gas, and the by product is carbon dioxide, a greenhouse gas. 

The Hunter Valley Hydrogen Hub proposes to deliver a safe, reliable and commercial scale hydrogen supply chain in the Newcastle industrial and port precinct. The proposed facility will produce renewable hydrogen via electrolysis using recycled water, renewable electricity and a grid-connected ~60MW electrolyser. While modest in size, the facility is designed to be scaled up through subsequent phases.

Renewable hydrogen manufactured at the hub will be used to progressively replace natural gas in our Kooragang Island site’s production of low-carbon ammonia and ammonium nitrate – crucial products for many businesses across NSW including the mining, agriculture, health, and food industries.

Orica has also partnered with the H2-Hub™ Gladstone to contribute towards a master plan for a proposed multi-billion dollar industrial-scale renewable hydrogen and low carbon ammonia production facility with export potential.

Manufacturing ammonia, a precursor to commercial explosives, is energy and emissions intensive and hard to abate. Renewable ammonia is an exciting prospect but one that isn’t commercially viable as yet, at scale. Our partnership will explore opportunities for renewable ammonia supplied directly to our Yarwun manufacturing plant and the potential of a renewable ammonia export terminal at the Port of Gladstone.

Helping our customers reduce their environmental and social impacts

By providing a range of new products and technologies that supports our customers to reduce emissions, minimise the environmental impacts of mineral extraction, and work more precisely, efficiently and safely. 

Demand for minerals like copper, lithium, nickel, manganese and cobalt, that are needed for electric cars, solar panels and other parts of the energy transition, is growing. The challenge is that these minerals are found deeper underground and are more expensive and complex to mine.

Orica has responded with a range of new technologies and products that support the improvement of mining methods through precision blasting, waste reduction, spill prevention and safety enhancements. Here are some examples:

WebGen™ 200: Improving precision and safety underground

WebGen™ is the first fully wireless system in the world that can communicate through hundreds of metres of rock, air and water to initiate precise (and therefore smaller) blasts. Mine personnel spend less time in the dangerous zones of a mine compared to traditional blasting systems because there are no downlines and surface connecting wires.

Fortis Protect: Lowering the impact of bulk explosives on waterways

Nitrate is a key ingredient in explosives, but it must be safely stored and handled to prevent groundwater pollution, environmental damage and risks to human health. Orica has developed a Nitrate Risk Reduction framework that assesses the risk of nitrate loss at a customer site, benchmarks existing approaches against best practices, and recommends solutions to improve nitrate risk management. Meanwhile our Fortis™ Protect bulk explosives products use advanced surface chemistry and increased viscosity to significantly reduce the risk of nitrate leaching from blasting operations as well as post-blast nitrate/nitrite fumes. 

Cyclo: Reusing and reducing waste oil from remote mine sites, while reducing emissions

Our innovative Cyclo™ service uses modular, relocatable units to process oil on mine sites and replace up to 50 per cent of the virgin diesel used to make emulsions with recycled oil. A greenhouse gas lifecycle analysis has also confirmed that the total lifecycle emissions of ‘Cyclo’ treated waste oil are 20 per cent lower than virgin diesel. This means our customers
can simultaneously reduce waste and their greenhouse gas emissions.

Download the case study here.

Helping build safe, resilient and thriving communities

Orica is a global company, but our people ultimately work within many local communities and building strong relationships with our local stakeholders is important to us. By understanding what communities want and need, we can better support their economic independence, help them thrive, and offer the right support in times of need. Here are some examples: 

The Clontarf Foundation: Building stronger communities

Breaking the cycle of disadvantage young indigenous men face relies on improving their education, life skills, self-esteem and employment prospects. Orica is proud to support the work of the Clontarf Foundation which provides school engagement and mentoring
programs to more than 10,000 young Aboriginal and Torres Strait Islander men across a range of communities in Australia. In addition to providing financial support, we host work site visits and participate in community events.

The YCAB Project: Creating women engineers in Indonesia

In this technological era, being skilled in STEM is becoming increasingly important to national economies and relevant in everyday lives. But in Indonesia, females account for only 2% of total students in STEM-based Vocational High Schools. The YCAB project has been developed to provide innovative online training and mentorship to 100 high school science teachers and 7,000 female students to inspire them to pursue careers in the STEM industry. Orica has provided substantial financial support, complemented by an internship program. 

Providing fresh water in Gomia, India

Orica’s Gomia site is located in a remote area where nearby communities collect water for drinking from a nearby river or a dug well that is unhealthy and unhygienic. Orica is now proving fresh, free drinkable water to nearby villages through 30kms of water pipelines and static storage tanks.

Helping when natural disasters hit

When a crisis or natural disaster hits, we work to ensure our people are safe and help our communities recover.

Download the case study here.

Creating value from waste

A supply and offtake agreement that Orica has secured with Alpha HPA is a great example of how industrial partnerships can optimise the use of resources and the value created from them while also reducing waste.

Alpha HPA produces high purity alumina which is a key-component in many technologies needed to drive a lower-carbon future such as electric vehicle batteries and LED lighting. Its proprietary technology requires reagents to purify raw materials – which Orica manufactures at its nearby plant in Yarwan, Queensland, Australia. At the same time, Alpha HPA produces ammonium nitrate as a by-product of its manufacturing process and this is key to Orica’s operations at Yarwan. Our exchange agreement is a win for both organisations as well as the circular economy.

Another example of how Orica is supporting sustainable and circular solutions is our long-term joint venture with Mineral Carbonation International (MCi). MCi is a start-up company focussed on commercialising carbon capture utilisation and storage (CCUS) technology by creating new products from ‘waste’. It won ‘Best Clean Energy Startup’ from a field of 2,700 global solutions at COP 26 in Glasgow.

Carbon dioxide is an industrial waste product of current hydrogen production processes. Along with pursuing alternative sources of hydrogen, CCUS is something we are investing in to help us meet our long-term net zero ambition.

MCi is creating valuable building products out of carbon dioxide. This year we supported the design, engineering and approvals for a demonstration-scale mineral carbonation plant at our site in Kooragang Island, Australia. The plant is scheduled for completion in 2024 and will use waste CO2 from our operations to produce a range of lower-carbon products for construction, manufacturing and consumer markets.

Download the case study here.