World-first hydrogen supply chain launched

In a world-first pilot project, liquefied hydrogen produced in Victoria will be exported to Japan.

The $500 million Hydrogen Energy Supply Chain (HESC) pilot project was launched today and will establish an integrated supply chain for environmentally sustainable hydrogen, produced from the Latrobe Valley’s brown coal.

A consortium of energy and infrastructure companies have partnered with the Japanese Government and the Commonwealth and Victorian governments for the project.

Japan has led the world in the move to a hydrogen economy, and has identified Australia as the ideal partner for hydrogen imports to meet its future energy needs.

The first shipment of hydrogen, from the pilot, is scheduled for 2020-2021.

If the pilot phase is successful, the HESC Project will enter its commercial phase in the 2030s.

Prime Minister Malcolm Turnbull said the four-year joint federal, state and industry project would create more than 400 jobs.

“It is an initial step towards a commercial-scale hydrogen supply chain to diversify energy sources,” the PM said.

“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.”

An artists’ impression of the HESC Port of Hastings

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 and the Japanese Government.

“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,” Mr Turnbull said.

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

“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.”

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

“The global hydrogen market is booming and we are thrilled that both the Victorian and Commonwealth governments wish to participate actively in this project, which has the potential to deliver a critical option for future global energy needs,” KHI’s Dr Eiichi Harada said.

“We are also eager to maximise the synergy between the HESC Project and the Victorian Government’s strategy for future uses of brown coal.

“Community engagement will be ongoing to provide local communities with further information on the project.”

Construction of the pilot facility is expected to commence in early 2019, following planning approvals.