Japan-Australia hydrogen energy supply join venture awarded $1.62 billion

15 March 2023

An Australian joint venture between Japanese organisations J-Power and Sumitomo Corporation has been selected as the preferred hydrogen provider to Japan Suiso Energy (JSE). The clean hydrogen gas will be produced from brown coal in Gippsland, Victoria and JSE will liquify the hydrogen for export to Japan.

The Suiso Frontier, H2 tanker - Image: Wikimedia/User: Hunini

The Japanese government has committed 220 billion yen ($1.62bn/£1.36bn) in funding towards the venture which has now entered its commercial demonstration phase. The joint venture will produce the hydrogen, extracted from coal with CO2 capture, utilisation and storage (CCUS). The coal will be extracted from Latrobe Valley in Gippsland in south eastern Australia.

J-Power has successfully produced 99.999% 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. Led by Kawasaki Heavy Industries, the $500 million HESC project has been backed by both Japan and Australia as a way to cut emissions.

The Latrobe Valley hydrogen production facility will benefit from the local skilled workforce, existing energy infrastructure and resources, the joint venture said in a statement. 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 venture 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.