A report by NSW Chief Scientist Hugh Durrant-Whyte titled Opportunities for prosperity in a decarbonised and resilient NSW says the Hunter's existing transport infrastructure, current large industry gas users and availability of greenfield sites, make it well suited to become a centre for future hydrogen production.

In addition to hydrogen production, the report also highlights opportunities in carbon capture and land management to improve sustainability.

But while the report, which identifies 65 economic opportunities for investment across key sectors of the state's economy, it does not include a timeframe for their establishment or commit to an investment strategy.

Despite that, NSW environment minister Matt Kean said on Monday that the time was right for governments to invest in low carbon technologies.

"We should be using the recovery to build a low carbon economy. Not just because it's good for the environment but because it's good for the state, the country and it's the kind of economy our kids will prosper from," Mr Kean said.

"This is not just wishful thinking. The International Monetary Fund and the International Energy Agency have recently joined forces in the post-COVID environment to develop a Sustainable Recovery Plan: in their words, it is a once-in-a-lifetime opportunity to reboot economies, create a wave of new jobs while accelerating the shift to a decarbonised future. Their plan focuses on how government spending over the next three years can maximise growth, create jobs and deliver sustainable development goals."

There are already plans to establish a natural gas export bub in the Port of Newcastle, presently the world's largest coal export port.

Industry and business groups said the presence of advanced manufacturing industries, energy generation networks and port facilities provided an ideal platform for the development of the hydrogen economy in the Hunter.

A Port of Newcastle spokesman said the port was pursuing diversification opportunities that would see it remain an international gateway for energy.

"We are committed to maintaining the port's status as Australia's leading energy port by supporting the global movement towards the use of renewable energy," he said.

"Port of Newcastle is well positioned to be a hub for the production and distribution of energy streams including hydrogen, LNG and solar, in addition to facilitating existing trade in thermal coal and liquid fuel.

"This supports the region's transition to alternative energy solutions, assists local industry looking for green energy options and provides more employment opportunities and economic prosperity for people across the Lower Hunter."

National Energy Resources Australia hosted a workshop in Newcastle earlier this year to discuss the feasibility and benefits of forming hydrogen industry clusters in key locations such as Newcastle.

Hunter Business Chamber chief executive Bob Hawes said the current momentum around the development of hydrogen as a clean energy source presented significant opportunities for regional development and growth.

"While expert commentary suggests that significant investment in hydrogen initiatives is still some way off, there is no reason the region should not be readying itself now," he said.

"Newcastle Institute of Energy and Resources is involved in a number of hydrogen-related research and industry initiatives. However, the ability of these to move forward will rest with the capacity of the market through private and public sector investment to commercialise and realise genuine industry opportunity.

"It appears we are not quite there yet but positive policy direction from respective levels state and federal government to generate more certainty in the energy sector would be welcomed."

The University of Newcastle presently has 14 hydrogen research projects, which have been broadly grouped into production, storage and utilisation, and cross-cutting fields.

In addition, the university's Priority Research Centre for Frontier Energy Technology and Utilisation is an Australian leader in low emissions and abatement technology research.

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Climate Councillor and former chairman of the Australian Renewable Energy Agency Greg Bourne said the research initiatives underway at the university, NEIR and the CSIRO, Newcastle presented a springboard for the region to move into hydrogen production.

"The human capital that you have up there in the engineering and science fields is superb," he said.

"As the hydrogen economy starts to build we will see pilot plant opportunities that will scale to commercial opportunities first for domestic use but the big prize for Australia is export."

Federal Labor announced a plan to create a $1.1 billion national hydrogen plan in the lead-up to last year's election.

The plan, identified Newcastle as a potential hydrogen hub.

"Hydrogen has the potential to be a game changer for our region and our environment and could be a key driver in the local transition we need to make to a low-carbon future," Newcastle MP Sharon Claydon said last May.

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