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The NSW government has funded its first project from a $750 million program to reduce emissions with a $13 million grant for a company at one of the state's biggest industrial sites in Newcastle.
Commercial explosives maker Orica will use the money to install emissions reduction systems that NSW Environment Minister Matt Kean says are expected to cut emissions at the company's nitric acid plants by up to 92 per cent.
It is the "first of many" projects to receive funding from the net zero industry and innovation program "which will help businesses accelerate their transition to net zero while remaining competitive and creating jobs", Mr Kean says.
He expects the project to cut nitrous oxide emissions equivalent to 567,000 tonnes of carbon dioxide per year, which is similar to the emissions of 50,000 homes.
The Orica plants sit in one of the state's biggest industrial sites at Kooragang Island in northern Newcastle.
NSW parliamentary secretary for the Hunter Taylor Martin says "a small number of existing high emitting industries, including manufacturing" present one of the biggest decarbonisation opportunities in the state.
The $13 million grant from NSW will add to $25 million Orica borrowed from the commonwealth's Clean Energy Finance Corporation (CEFC) to upgrade processing plants used to produce ammonium nitrate.
The CEFC says Orica will install nitrous oxide abatement technology highlighted in the commonwealth's technology investment roadmap discussion paper, the first time the technology will be used in Australia.
Federal Energy and Emissions Reduction Minister Angus Taylor says the investment at the Orica site "will be one of the largest single abatement project to be financed by the CEFC... and is a great example of how governments and industry can work together to reduce emissions and grow industries in our regional communities".
Orica CEO Sanjeev Gandhi says the project will "allow us to look at longer-term investments in technologies" including renewable hydrogen and ensure the company's domestic manufacturing "remains competitive in a low carbon economy".
The project is expected to take three months to complete and begins next year.
"This is a massive abatement at one of the state's largest heavy industrial sites, which will help New South Wales meet its target of halving emissions by 2030," Mr Kean said.
NSW also has a further target to reach net zero emissions by 2050.
On Saturday, Opposition Leader Chris Minns said Labor would introduce a bill to have the targets written into law.