Japan Commits AUD$2.35B to Establish World’s First Liquefied Hydrogen Supply Chain

Australia’s most advanced clean hydrogen project, the Hydrogen Energy Supply Chain (HESC) project in Victoria, has entered the commercial demonstration phase with the commitment of JPY220 billion approximately AUD$2.35 billion, in funding from the Japanese Government’s Green Innovation Fund.

The funds will be delivered via Japan Suiso Energy (JSE) comprising Kawasaki Heavy Industries and Iwatani Corporation. A newly formed J-POWER and Sumitomo Corporation Joint Venture (JPSC JV) will supply 30,000 tonnes of clean hydrogen gas per year, to a JSE owned and operated liquefaction and shipping facility at the industrial Port of Hastings.

This major injection of capital enables JSE to design and build commercial scale facilities to liquefy and ship the hydrogen from Port of Hastings to the Port of Kawasaki in Japan, bringing significant economic benefits to Victoria and Hastings in particular.

The JPSC JV will extract the hydrogen from Latrobe Valley coal with CO2 capture and storage facilities in the nearby Bass Strait. The project will help reduce atmospheric CO2 on the path to net zero by 2050 and at full commercial scale, create many sustainable energy jobs, in the Latrobe Valley and Hastings.

Japan Suiso Energy CEO, Dr. Eiichi Harada said, “After a decade of working together with the Japanese, Australian and Victorian Governments, our efforts to establish a world-first clean hydrogen energy supply chain have been rewarded. This is truly a watershed moment for our combined efforts to decarbonise global energy production. This commitment of AUD$2.35 billion gives all participants in the hydrogen supply chain the confidence to progress to the next stage of commercialisation.”

“This is a complex project and there is still some way to go in terms of approvals, design, construction and commissioning but this is a major boost for the Victorian economy on its journey towards a clean energy future”, said Dr. Harada. “The project will bring new clean energy infrastructure and jobs to the Hastings and Latrobe Valley communities. Something, we think is very important as we support the people through this period of change, as well as the broader energy sector.”

Jeremy Stone, J-POWER Latrobe Valley Non-Executive Director said; “We are moving from start up to scale up phase, which is an exciting time for J-POWER and our joint venture partner, Sumitomo Corporation. Bringing commercial scale hydrogen production to the Latrobe Valley will act as a catalyst for growth in the broader Gippsland region, as complementary industries such as Ammonia, Fertiliser and Methanol are attracted to the opportunities it presents.

“Gippsland presents a unique opportunity to help reduce global CO2 emissions through the reliable production of large quantities of cost-effective clean hydrogen. Beyond the abundance of natural resources, the area has unrivalled access to a skilled workforce, major energy infrastructure and viable long-term storage for captured CO2 in the Bass Strait. Subject to commercial agreements and meeting the required environmental permits and approvals it is expected hydrogen production will commence by late 2020s.”

Carbon intensity

The carbon intensity of the hydrogen produced will be verified using the Guarantee of Origin scheme which is being developed by the Australian Government in line with global hydrogen markets. This will facilitate the accurate assessment and determination of the carbon intensity (kgCO2/kgH2) of hydrogen produced. This provides certainty to customers that production and transport of clean hydrogen meets their carbon dioxide emission reduction requirements.

The Inter-Governmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) support carbon capture and storage as a way of achieving carbon neutrality by 2050 and avoiding catastrophic climate change.