The Hunter Valley has been named as a possible location for a regional hydrogen export hub under a federal government plan to reduce carbon emissions.
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Prime Minister Scott Morrison announced on Thursday that the federal government would spend $70 million in this financial year's budget on the hub.
Minister for Energy and Emissions Reduction Angus Taylor said the money would "support the regional hydrogen hub, which will be established through a competitive process".
The government will seek co-investment from industry and state governments for the establishment of an export hub with at least one key bilateral trading partner such as Korea, Japan or Germany.
Potential locations include, but are not limited to, Latrobe Valley (Vic), Darwin (NT), north-west WA, Gladstone (Qld), Hunter Valley (NSW), Bell Bay (Tasmania) and Spencer Gulf (SA).
"The government expects the hub will attract local and international investment, and will co-locate hydrogen production and users to grow export supply chains," Mr Taylor said.
The Port of Newcastle said it was looking forward to "seeing the opportunities this announcement offers".
The hydrogen hub is part of a $1.9 billion plan that Mr Morrison said would focus on "future technologies to reduce emissions".
"Solar panels and wind farms are now clearly commercially viable and have graduated from the need for government subsidies and the market has stepped up to invest," Mr Morrison said.
The government's plans include $50 million for "piloting carbon capture projects that will dramatically help cut emissions".
Federal Shortland MP Pat Conroy said if the government was serious about investing in hydrogen, it would have "matched Labor's $1.1 billion hydrogen plan".
"Labor has indicated we would support the establishment of separate carbon capture and storage funding, but we are opposed to a raid on the renewable energy funds of ARENA [Australian Renewable Energy Agency] as this appears to be," he said.
University of Newcastle Associate Professor Hao Tan said the government funding was "relatively small" compared with similar recovery packages focusing on new green energy technologies, such as in South Korea.
Dr Tan said the "change of the investment rules" around carbon-capture and storage were concerning, as its viability on a commercial scale had been consistently questioned.
"Public funding invested in this area may end up making the phase-outs of coal harder," he said.
