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In 2022, then-treasurer Matt Kean set things in motion to undo the deal struck by his predecessors, passing legislation in November of that year and asking the Independent Pricing and Regulatory Tribunal to determine a fair price. He said on Tuesday he welcomed the move by the Port of Newcastle.

A spokesperson for NSW Transport Minister Jo Haylen said the payment meant the Port of Newcastle was free to expand its container capacity and the government was considering its position on a large-scale container terminal at Newcastle as part of its freight reform plan.

Carmody said that, when the port was privatised in 2014, the Abbott government had repealed the emissions trading scheme and other clean energy policies, and “coal was king”. But the day he started as chief executive in 2018 was the same day the coal companies told the port they did not want to build a fourth coal terminal after all.

Carmody said major export customers such as Japan, Korea and China were rapidly phasing out coal and the market could die within about a decade. Instead, Port of Newcastle could be a natural hub for grain and cotton exports from the northern half of the state, and to develop and sell clean energy such as green hydrogen. He said the company would aggressively compete on price to win import customers.

For several years, the Port of Newcastle has been targeted by regular climate protests blockading the port. In November, activist groups Rising Tide and School Strike 4 Climate organised 3000 people on a flotilla of kayaks and pontoons to blockade the port for 36 hours.

Law student Zack Schofield, who was one of 109 protesters arrested but had no conviction recorded, said Rising Tide celebrated the milestone in the port’s transition from coal, but it remained a symbolic target.

“Until the government takes on the fossil fuel corporations and stops approving new coal and gas, we’ll continue to disrupt coal exports from Newcastle,” Schofield said.

A Deloitte analysis commissioned by the Port of Newcastle in 2018 found a new container terminal in Newcastle could shift hundreds of thousands of trucks off Sydney roads.

Carmody said the analysis was before his time, but he lives in Rozelle, so he was well aware of the gridlock on Sydney roads and the fact that WestConnex had not solved the problem. Transurban declined to comment.

Sims said it was “blindingly obvious” that a container terminal in Newcastle would improve traffic congestion in Sydney by diverting trucks from Port Botany.

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However, a NSW Ports spokesperson disputed this, pointing out that 90 per cent of its imports were destined to within 50 kilometres of Port Botany and would need to be trucked from Newcastle back to Sydney, while more than 90 per cent of regional exports arrived by rail.

The spokesperson said additional container capacity in NSW would not be required for several decades and it was important that government policy for infrastructure investment remained consistent.

“Government investment should not be distracted to supporting a container terminal at the Port of Newcastle, which has been demonstrated to make no sense and any investment of taxpayer dollars would be unjustified,” the spokesperson said.