A billion-dollar hydrogen plant improves Gippsland’s job prospects

The Latrobe Valley’s dwindling coal industry is set to be revived as Japan’s Green Energy Fund launches a multi-billion dollar commercial liquefaction and shipping facility at the Port of Hastings in Victoria. It will process hydrogen derived from coal, creating the world’s first liquefied hydrogen supply chain.

The joint venture, led by Japan’s largest industrial conglomerates, will use carbon capture and storage technology to sequester CO2 in Bass Strait. It will also ship the subcooled hydrogen, derived from coal, in purpose-built bulk carriers from Hastings to Kawasaki, the Asian country’s heavy industry hub.

Hydrogen – which emits only water when burned – has been touted as a promising future tool to decarbonize heavy industry, provided the method of producing it is also zero-emissions. Governments and businesses are looking to hydrogen for its ability to store and transport energy produced from renewable sources and to clean hard-to-decarbonize parts of the economy.

Japan, Australia’s largest buyer of LNG, has set a goal of “net-zero” emissions by 2050 and is banking on hydrogen to reduce the role of fossil fuels. Four of the country’s industrial titans – Kawasaki Heavy Industries, Iwatani Corporation, J-Power and Sumitomo Corporation – are backing the company, which will produce, liquefy and deliver hydrogen in a world-first integrated supply chain.

The hydrogen terminal at the Port of Hastings has emerged from a $500 million pilot project – the Hydrogen Energy Supply Chain – led by a consortium of Japan’s J-Power, Kawasaki Heavy Industries, Shell and AGL that has successfully implemented the conversion of Lignite in the Latrobe Valley has demonstrated hydrogen gas and exported the fuel to Japan last year in the world’s first purpose-built liquid hydrogen transporter.

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“The hydrogen economy has the potential to create thousands of jobs in Victoria and play a crucial role in global emissions reductions,” said Victorian Trade and Investment Secretary Tim Pallas. The federal and state governments have tipped funding into the pilot project.

Japan’s $24 billion Green Innovation Fund has committed $2.35 billion to support the construction of the hydrogen plant in Hastings and the construction of a 160,000 cubic meter bulk carrier capable of transporting the liquid hydrogen to Kawasaki.

The bulk carrier will be powered by its hydrogen cargo without the need for fossil fuels. The joint venture is studying potential sites in Hastings on which to build the terminal and liquefaction plant.