Orica Confirms Major Decarbonisation Projects On Passage Of Safeguard Reforms

Orica supports the Federal Government’s reform of the Safeguard Mechanism, and the policy certainty will see further deployment of Australian-first emissions reduction technology across its manufacturing sites at Newcastle and Gladstone. 

In 2020, Orica established a voluntary corporate emissions reduction target to reduce scope 1 and 2 operational emissions by at least 40 percent by FY30ⁱ. Since then, Orica has voluntarily deployed emissions abatement technology and optimised its manufacturing processes to realise a net reduction in greenhouse gas emissions of 14 per cent since FY2019ⁱⁱ.  

The Safeguard reforms which passed Parliament this week will bring renewed policy confidence and investment certainty to industry. It will enable Orica to finalise decarbonisation projects already underway and confirm new initiatives that will deliver real, tangible emissions reduction projects at its two Australian Safeguard manufacturing sites. The carbon credits from these investments will be delivered to the Commonwealth to both comply with new, tougher Safeguard baselines and also meet Orica’s corporate emission reduction goals. 

Orica will continue its Kooragang Island Decarbonisation Project with confidence – an initiative designed to eliminate at least 567,000 tCO2e per year from the site’s operations and 11 per cent of Australia’s total chemical industry process emissionsⁱⁱⁱ. The tertiary catalyst abatement technology being installed at the facility is an Australian first and is expected to reduce the site’s total emissions by 48 per cent. The cumulative emissions reduction will be at least 4.7 MtCO2e by 2030 based on forecast production^iv.  

The passage of the Safeguard reforms also gives Orica investment certainty to proceed with the Final Investment Decision for the Yarwun Nitrates Decarbonisation Project to deploy similar tertiary catalyst abatement technology at its Yarwun manufacturing facility in Gladstone, Queensland. Orica intends to execute the initiative at the next suitable maintenance shutdown. This tertiary catalyst abatement project is estimated to reduce scope 1 emissions from the site by 200,000 tCO2e per year and avoid a total of 1.5 MtCO2e by 2030^v.   

The government has confirmed this week that Orica’s two Carbon Abatement Contracts covering both projects at Kooragang Island and Yarwun will remain in place for their full seven-year terms. 

Orica Chief Executive Officer Sanjeev Gandhi said:  

“Orica strongly supports the Government’s reforms and strengthening of the Safeguard Mechanism, and we commend the Government’s consultative approach and commitment to making this scheme work.  

“We share the Government’s goal of reducing industrial emissions as soon as possible and Orica has already set voluntary corporate emissions reduction goals and made significant capital-intensive investments in reducing scope one emissions. These plans represent real abatement and real decarbonisation on-site, having already delivered a net 14 per cent reduction in our overall emissions. 

“This clearly demonstrates that with the right policy settings and corporate commitments; emissions reduction is possible in hard to abate and expensive to abate sectors of the economy. Thanks to this policy certainty, we can continue delivery of our broader decarbonisation plans across our operations and ensure Australia remains competitive as the world transitions to a lower-carbon economy.”  

To find out more about Orica’s decarbonisation efforts, visit orica.com/sustainability.  

ⁱ From 2019 levels, and existing operations - reference baselines will be adjusted for any material acquisitions and divestments based on GHG emissions at the time of the transaction.
ⁱⁱ Target to reduce scope 1 and 2 emissions by at least 40 per cent by 2030, from 2019 levels. FY2022 outcome of net 14 per cent below FY2019 levels includes the surrender of 60,000 Australian Carbon Credit Units to proactively maintain our net emissions below a regulatory emissions limit in Australia.
ⁱⁱⁱ Grattan Institute, 2021, Towards net zero – practical policies to reduce industrial emissions, report number 10-2021 August 2021. 
^iv Based on forecast nitrous oxide emissions intensity of 0.13 tonnes of CO2e per tonne of ammonium nitrate produced, adopting nitrous oxide global warming potential factor of 298 as prescribed under the National Greenhouse and Energy Reporting (Measurement) Determination 2008 (Amendments for 2019-20).
^v Based on forecast production at 2023 and vendor provided tertiary catalyst abatement operational effectiveness