The Hydrogen Energy Supply Chain (HESC) project, Australia’s most advanced clean hydrogen project, has selected its preferred hydrogen provider and entered the commercial demonstration phase with a commitment from the Japanese Government’s Green Innovation Fund.

An Australian joint venture between Japanese organisations, J-Power and Sumitomo Corporation (JPSC JV), has been selected as the preferred hydrogen provider to Japan Suiso Energy (JSE). The project will produce 30,000t of clean hydrogen gas per year in Gippsland, Victoria and JSE will liquify the hydrogen for export to Japan.

The JV will produce the clean hydrogen, which will be extracted from Latrobe Valley coal with CO2 capture, utilisation and storage (CCUS). The project will help reduce atmospheric CO2 on the path to net zero by 2050 and at full commercial scale, creating many sustainable energy jobs, in the Latrobe Valley and Hastings.

J-Power successfully produced 99.999 per cent pure hydrogen gas, extracted from Latrobe Valley coal, as part of the Hydrogen Energy Supply Chain (HESC) Pilot Project, which achieved a world first liquid hydrogen supply chain with the delivery of the hydrogen at the Port of Kobe in Japan in February 2022.

The Japanese Government’s Green Innovation Fund has committed $220 billion yen (approximately $2.35 billion) to the project, delivered via Japan Suiso Energy (JSE), comprising Kawasaki Heavy Industries and Iwatani Corporation. 

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.

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$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.

“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.”

J-Power Latrobe Valley Non-Executive Director, Jeremy Stone, said, “We are moving from startup 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.”

Mr Stone said building on the success of HESC and J-Power’s 166MW Osaki CoolGen project, the latest developments bring commercial scale hydrogen production in Victoria a step closer to being a reality.

“This is a major milestone and a recognition of Gippsland’s unique ability to help reduce global CO2 emissions through the reliable production of large quantities of cost competitive and clean hydrogen,” Mr Stone said.

The Latrobe Valley hydrogen production facility will benefit from the local skilled workforce, existing energy infrastructure and resources. The project will take advantage of one of several long-term CO2 storage solutions, including using the depleted oil and gas reservoirs in Bass Strait for the CO2 emissions that cannot be utilised.

The JPSC JV will initially produce between 30,000 to 40,000 tonnes per annum of gaseous clean hydrogen. A future potential production of 225,000 tonnes per annum, would reduce about 1.8 million tonnes per annum of CO2 from being released into the atmosphere (equivalent to the emissions of about 350,000 petrol cars). Subject to commercial agreements and meeting the required environmental permits and approvals, it is expected hydrogen production will commence in the late 2020s.

Mr Stone said, “There is significant domestic interest in a reliable source of locally produced, cost competitive clean hydrogen. Now we have countries establishing the definition of “clean hydrogen”, based on carbon intensity, we are seeing an opening of trade, based on credible and transparent CO2 reduction numbers, at various price points. We are expecting further offtake agreements for hydrogen that can be used by a wide range of businesses and industrial processes, including the production of ammonia, fertiliser and methanol.”

Japan Suiso Energy CEO, Dr Eiichi Harada said, “We are delighted to have selected the JPSC JV as the preferred supplier of clean hydrogen for the Japanese energy market as we continue our transition to a more sustainable clean energy future. 

“We look forward to working with the JV and the Victorian, Australian and Japanese governments to achieve the significant economic and emission reduction benefits that a commercial scale clean hydrogen project will deliver.”

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