Orica secures almost half of the carbon credits on offer at the latest Emissions Reduction Fund auction.

The company, which secured contracts to deliver 3.37 million tonnes of abatement, will use them to reduce the plant's pollution footprint.

The Clean Energy Regulator paid bidders an average price of $15.99 per tonne, or $108 million over the next 10 years, to reduce pollution.

Orica is considering investing in a yet-to-be announced emission reduction technology at the Kooragang Island plant, which produces ammonia, nitric acid and ammonium nitrate.

Nitrous oxide, which has a global warming potential 265 times higher than carbon dioxide, is among the plant's by products.

An Orica spokeswoman said the company was pleased it had been awarded an optional delivery carbon abatement contract.

"This, together with approval to generate carbon credits, demonstrates strong validation and support for our plans to decarbonise operations at Kooragang Island," she said.

"There are a number of logistic and economic enablers that still need to be resolved before a final decision to proceed with emissions abatement can be made."

Orica announced last month that it will spend $39 million upgrading the Kooragang Island prill tower as part of a drive to reduce air pollution.

The upgrade is expected to reduce PM2.5 (fine particle) ammonium nitrate emissions by 99 per cent.

A 2014 Lower Hunter air particle characterisation study found that ammonium nitrate emissions from the plant contributed up to 40 per cent of fine particle air pollution in Stockton.

Minister for Energy and Emissions Reduction Angus Taylor said Australia had one of the largest and most sophisticated emissions reduction funds in the world.

"The ERF continues to back projects that deliver on-the-ground practical action to reduce emissions, providing benefits to our farming and Indigenous communities, and is helping business and industry to offset their emissions," he said.

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"The government is focused on ensuring Australia's role in the global effort to reduce emissions doesn't come at the expense of our prosperity and the ERF is central to that."

Participation in the ERF is growing with 117 projects registered after the September 2020 auction, including 44 in 2021.

These projects are expected to generate tens of millions of tonnes of emissions reductions towards Australia's international targets.

and will support rising voluntary private demand for Australian Carbon Credit Units.

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