Chief executive Sanjeev Gandhi said regulations forcing companies to switch to cleaner products are needed to overcome a refusal to pay more.
Regulations are needed to force companies to switch to using cleaner alternative products because they are otherwise unwilling to pay the higher prices that more environmentally friendly products involve, according to Orica chief executive Sanjeev Gandhi.
“We are successful in Europe, we now need to roll this out globally,” Mr Gandhi said in an interview after The Australian Financial Review Business Summit, where Short-listed for Headstart funding along with five other projects, the Hunter Valley hydrogen hub would, if successful, receive a production credit to make up the gap between the cost of production and the sales price. The subsidy would decline annually as production scales up and unit costs fall.
Orica is still targeting financial close on its Newcastle hydrogen project this year, but complicating the process is the lack of certainty over funding from the Headstart program while the costs of electrolysers have “blown out significantly”.Meanwhile, sourcing competitive gas for Orica’s operations on the east coast remains a big headache despite the $12-a-gigajoule price cap imposed by the federal government early last year.
Mr Gandhi said the reality was “manufacturing is struggling across the board” in Australia, reiterating the need for carbon border tariffs to protect industry, as well as competitive energy.Carbon Markets Institute chairwoman Kerry Schott told the Summit earlier this week that Australia’s cement industry was already suffering from not having a carbon border tax system.
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