Sweetman signsjoint venture to create Hydrogen hub in the Hunter Valley
- Written by Justin Kelly
Emerging renewables energy business, Sweetman Renewables Limited, has today inked a lucrative, multi-million dollar Joint Venture agreement with CAC-H₂ Private Limited of Singapore to establish a Hydrogen Production Centre of Excellence in the NSW Hunter Valley. The $15m deal aims to establish Australia’s first wood fed hydrogen production plant, and the country’s largest green bio-hydrogen production eco-hub.
CAC-H₂ brings proven gasification technology that converts woodchip into 99.999% pure hydrogen via a proven proprietary process. CAC-H₂ also brings Off-take Agreements for 100% of Sweetman Hydrogen and Biochar production. The deal is likely to create 40 full time jobs at the new facility to be named Hunter Valley One.
The joint venture deal involves investment from CAC-H₂ in return for 80% ownership of the new enterprise to establish the first two production lines on a 30-acre site adjacent to the Sweetman’s Millfield timber mill. Sweetman will provide the Biomass Feedstock, EPC engineering services and land access in return for 20% equity in the JV.
Sweetman will provide 30,000 tonnes of wood biomass per annum. The initial deal will produce an estimated AUD $170m in revenues over 15 years, based on a conservative wholesale price estimate of AUD $6 per kilogram. Construction is due to commence soon given planning applications have been approved.
Mr Arman Massoumi, Director of CAC-H₂ Group said: “We are excited by the opportunity to partner with Sweetman to establish what we want to become the first wood to hydrogen, and Australia’s largest green Bio-Hydrogen Production Eco-Hub.”
“We initially planned to start with just two production lines but due to large demand from both Japan and Korea, we envisage to quickly scale up the Sweetman operation to multiple lines producing Hydrogen and Biochar for export markets via a new facility at the Newcastle Port.”
The Hunter region of NSW is set to become the home of one of the state’s first green hydrogen hubs with the NSW Government committing at least $70 million to their development.
Hydrogen hubs will provide groups of hydrogen users common infrastructure for the local production, use and distribution of hydrogen. They will reduce costs by delivering hydrogen in a coordinated fashion. Developing green hydrogen hubs aligns with the NSW Renewable Energy Zones under the Electricity Infrastructure roadmap, ensuring they become thriving precincts.
Sweetman Renewables’ Director Garry Millar said the JV would pave the way for a viable, new eco-friendly future for the Hunter Valley.
“We have heard the call from both State and Federal government to make the Hunter Valley a Centre of Excellence for the production of Hydrogen,” said Garry Millar.
“The New plant will not only act as a showcase for the proven technology, it will create new jobs in construction, production, transportation, materials handling and service and maintenance, all of which will be sourced from within the Newcastle area.”
Mr Glenn Davies, CEO of CAC-H₂ said: “Over the next 2 years our JV will establish new Hydrogen Hubs in every State in Australia. Sweetman has already obtained expressions of interest to establish another Hydrogen hub at Newcastle Port and in additional hubs in Queensland and Victoria”
In a recent report released by the International Energy Agency (IEA), it stated that global demand for hydrogen would need to more than double from its existing level of consumer to 212 million tonnes by 2030 if the world is to attain climate change goals.
The market size for hydrogen in 2022 is projected to be $154.74 billion. By 2050, driven by a burgeoning global demand for zero-carbon emissions, the hydrogen market is expected to be valued at $12 trillion.
Sweetman Renewables, with its 100-year old sawmill business, is currently conducting a pre-IPO capital raise ahead of its planned debut on the ASX. Boutique corporate advisor Barclay Pearce Capital is conducting the raise, given their expertise in the green energy sector. Sweetman aims to leverage its unique access to biomass to become an Australian renewable energy powerhouse of green hydrogen production.