The Federal Government has announced it will invest $50 million into a world-first Hydrogen Energy Supply Chain (HESC) pilot project in Victoria’s LaTrobe Valley.   

The pilot project will turn brown coal into hydrogen as Australia continues to diversify its energy sources.

The pilot will create over 400 direct and indirect jobs, and is an initial step towards a commercial-scale hydrogen supply chain to diversify energy sources.

Hydrogen energy is currently used in cars, electricity generation and industry.

The four-year joint federal, state and industry project will demonstrate the feasibility of turning brown coal from the abundant reserves in the Latrobe Valley into hydrogen to be exported to Japan.

A commercial HESC project has the potential to grow to add more than $8 billion to Australia’s economy.

“We are not only creating a new industry and jobs in the Latrobe Valley and Port of Hastings, but building local skills in a future global hydrogen industry, estimated by the Hydrogen Council to be worth $2.5 trillion in 2050,” Mr Turnbull said.

“As our economy transitions, we must create new industries to provide jobs for today and tomorrow.

“Our CSIRO hydrogen and energy experts will be working with their Japanese counterparts, maximising the exchange of scientific knowledge created from the pilot, including in carbon capture and storage.

“Australia is well-placed to become a global hydrogen production and export leader, with abundant resources, excellent infrastructure and technical prowess in commodity development.”

Mr Turnbull said the project builds on the long-standing trade relationship between Japan and Australia on energy and resource commodities.

“Investing in this feasibility pilot is a down payment on our future economic prosperity and security. We now embark on four critical, groundbreaking years.

“The world-first Hydrogen Energy Supply Chain pilot project is significant for the cutting-edge science and technology it uses, for the potential it represents for Australian industry in hydrogen production and export, and for the jobs it will create.”

The Australian and Victorian Governments are providing a combined $100 million in funding to the $496 million pilot project, co-funded by a Japanese consortium — led by Kawasaki Heavy Industries (KHI) — and the Japanese Government.

The project is being delivered by a consortium of large Japanese and Australian companies, including Kawasaki Heavy Industries, J-Power (Electric Power Development), Iwatani Corporation, Marubeni and AGL. 

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