Australia’s most advanced clean H₂ project, the H₂ Energy Supply Chain (HESC) project in Victoria, has entered the commercial demonstration phase with the commitment of $1.56 B in funding from the Japanese Government’s Green Innovation Fund.

The funds will be delivered via Japan Suiso Energy (JSE) comprising Kawasaki Heavy Industries and Iwatani Corporation. A newly formed J-POWER and Sumitomo Corporation Joint Venture (JPSC JV) will supply 30,000 tpy of clean H₂ gas, to a JSE owned and operated liquefaction and shipping facility at the industrial Port of Hastings.

This major injection of capital enables JSE to design and build commercial scale facilities to liquefy and ship the H₂ from Port of Hastings to the Port of Kawasaki in Japan, bringing significant economic benefits to Victoria and Hastings in particular.

The JPSC JV will extract the H₂ from Latrobe Valley coal with CO₂ capture and storage facilities in the nearby Bass Strait. The project will help reduce atmospheric CO₂ on the path to net zero by 2050 and at full commercial scale, create many sustainable energy jobs, in the Latrobe Valley and Hastings.

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 H₂ energy supply chain have been rewarded. This is truly a watershed moment for our combined efforts to decarbonize global energy production. This commitment of $1.56 B gives all participants in the H₂ supply chain the confidence to progress to the next stage of commercialization.”

“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,” said Dr. Harada. “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.”

Jeremy Stone, J-POWER Latrobe Valley Non-Executive Director, said, “We are moving from start up to scale up phase, which is an exciting time for J-POWER and our joint venture partner, Sumitomo Corporation. Bringing commercial scale H₂ production to the Latrobe Valley will act as a catalyst for growth in the broader Gippsland region, as complementary industries such as ammonia, fertilizer 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 H₂. 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 H₂ production will commence by late 2020s.”

The carbon intensity of the H₂ produced will be verified using the Guarantee of Origin scheme which is being developed by the Australian Government in line with global H₂ markets. This will facilitate the accurate assessment and determination of the carbon intensity (kgCO₂/kgH₂) of H₂ produced. This provides certainty to customers that production and transport of clean H₂ meets their carbon dioxide emission reduction requirements.

The Inter-Governmental Panel on Climate Change and the International Energy Agency support carbon capture and storage as a way of achieving carbon neutrality by 2050 and avoiding catastrophic climate change.