Victorian Hydrogen plans to invest $3 billion in a lignite-to-urea fertilizer plant in New Zealand

Victorian Hydrogen, an Australian developer, has announced plans for a US$ 3 billion lignite-to-urea fertilizer plant in Southland, New Zealand. The facility, located approximately 30 km northeast of Invercargill, aims to reduce import dependence and stabilize domestic supply by producing up to 1.5 million tonnes of urea annually. The project is expected to undergo a fast-track approvals process. Preliminary geological and hydrological studies will be completed by spring, with a targeted three-year timeline to reach full production.

Executive Director Allan Blood stated the project will use established lignite gasification technology to convert coal into urea through hydrogen and ammonia synthesis, similar to a recent plant in Zambia. He noted the development will not require farm acquisitions, as mining will occur in narrow, rotating strips with progressive land rehabilitation. The company is also evaluating environmental uses for captured carbon dioxide, such as algae-based animal feed, construction materials, and emissions-reduction technologies, and plans to generate surplus electricity for potential export to the grid.

This proposal comes as New Zealand faces tightening domestic gas supplies and ongoing exposure to global fertilizer market volatility. Blood stated the country imports about 500,000 tonnes of urea annually and produces approximately 265,000 tonnes domestically, a figure that may decrease further. Rob Scott observed that increasing local production could reduce reliance on imports, but emphasized the need to carefully evaluate environmental and economic impacts as the project progresses.