About the Project

HESC’s Vision

The world-first Hydrogen Energy Supply Chain (HESC) Project aims to safely produce and transport clean liquid hydrogen from Australia’s Latrobe Valley in Victoria to Kobe in Japan. A key objective of the pilot project is to demonstrate an end-to-end supply chain between both countries.

A global, clean energy solution

The Fuel Of The Future

Hydrogen is a clean-burning fuel with a range of uses, from powering vehicles to storing energy. Hydrogen can make a significant contribution to the required transition to clean energy by replacing existing fuels and reducing COemissions by many gigatonnes and across a broad range of applications.

A game changer

A Game Changer

The project has the potential to be a game-changer – providing an innovative, economically viable and environmentally conscious solution to producing clean hydrogen safely, through gasification of coal with carbon capture and storage (CCS).

The Pilot Phase

The HESC Project is being developed in two phases, beginning with a pilot, which aims to demonstrate that hydrogen can be produced using Latrobe Valley coal and transported to Japan. Key elements of the pilot supply chain include:

  • Hydrogen is produced from coal at a newly constructed plant located at AGL’s Loy Yang Complex in the Latrobe Valley through a coal gasification and gas-refining Carbon offsets have been purchased to mitigate emissions from the pilot. In the commercial phase, carbon dioxide would be captured during this process and stored deep underground in a process known as carbon capture and storage (CCS).
  • The hydrogen gas is transported by truck to a liquefaction and loading terminal at the Port of Hastings, the first of its kind in Australia.
  • The hydrogen gas is liquefied and then loaded on to a specially designed marine carrier for shipment to Japan.

The decision to progress to a commercialisation phase, which will produce clean hydrogen from coal with CCS, will be made after the pilot project is completed.

Why did the HESC Project start?

Climate change is a massive global threat that requires us to pursue a range of clean energy options, now. We are pursuing hydrogen from coal with CCS because producing hydrogen through electrolysis is currently more expensive. Additionally, a commercial HESC Project can expand and produce hydrogen at the scale needed to meet growing global hydrogen demand.

Clean hydrogen from HESC will also contribute to emissions reductions, reducing global CO2 emissions by 1.8 million tonnes per year (equivalent to the emission of about 350,000 petrol-driven cars), while paving the way for renewable hydrogen projects.

HESC will create jobs for Australians

The current HESC Pilot Project is creating approximately 400 jobs across the Victorian supply chain. It has the potential for thousands more in the commercial phase, including in a region in an economic transition.

Australia could be the first country to create a thriving hydrogen export industry with huge local economic benefits and contribute to global environmental goals. The HESC Project will also help develop critical infrastructure, sustainable jobs, and in-demand skills in Australia. These are crucial ingredients for a clean hydrogen market.

The pioneering pilot project is delivered by a partnership between Japanese and Australian experienced industry partners supported by the Victorian, Australian and Japanese Governments.

HESC Japan

When is it happening?

The HESC project has a number of phases. The phase being proposed and
discussed now is a small pilot to demonstrate a fully integrated supply chain
before starting commercial scale operations.

2018

Approval from local, state, and federal authorities and community engagement for the pilot phase.

2019

Pilot Phase. Construction of the pilot facilities began in 2019, following planning approvals. Pilot operations started in 2021 and are expected to run for approximately one year through to 2022.

2020s

The decision to proceed to commercial phase will be made in the 2020s with operations targeted in the 2030s, depending on the successful completion of the pilot phase, regulatory approvals, social licence to operate and hydrogen demand.

HESC Governance

For funding purposes, the pilot phase is split into different delivery portions – a Japanese funded portion and an Australian funded portion.

Australia

The Australian funded portion is coordinated by Hydrogen Engineering Australia (HEA), a consortium comprised of KHI, J-POWER, Iwatani, Marubeni, AGL and Sumitomo. HEA is a 100 per cent subsidiary of KHI. The Australian and Victorian Governments are providing funds to the Australian portion.

Hydrogen Engineering Australia (HEA) has established an office in Melbourne to administer the project locally.

J-Power Latrobe Valley Pty Ltd (JPLV) is based in Traralgon to manage the Latrobe Valley components of the project. JPLV is a subsidiary of J-Power.

Japan

The Japan funded portion of the HESC pilot phase is coordinated by the CO2-Free Hydrogen Supply Chain Technology Association (HySTRA), acting on behalf of KHI, J-POWER, Iwatani, Shell, Marubeni, ENEOS Corporation and Kawasaki Kisen Kaisha, Ltd. (“K” LINE).

The Japanese funded portion includes converting coal to gas in the Latrobe Valley, transporting liquefied hydrogen by sea and then unloading it in Japan. The Japanese Government is providing funds to the Japanese portion.


HESC Partners

The pioneering project is being delivered by a partnership between Japanese and Australian experienced industry partners and supported by the Victorian, Australian and Japanese Governments.

The consortium of industry partners from Japan and Australia includes Kawasaki Heavy Industries, Ltd (KHI), Electric Power Development Co., Ltd. (J-POWER), Iwatani Corporation (Iwatani), Marubeni Corporation (Marubeni), AGL Energy (AGL) and Sumitomo Corporation (Sumitomo). Royal Dutch Shell (Shell), ENEOS Corporation and Kawasaki Kisen Kaisha, Ltd. (K-Line) are also involved in the Japanese portion of the project.

Supporting Organisations

  • CarbonNet is a joint initiative of the governments of Australia and Victoria aimed at establishing a large-scale commercial Carbon Capture and Storage (CCS) network.
  • The Global CCS Institute is an international member-led organisation whose mission is to accelerate the deployment of CCS as an imperative technology in tackling climate change and providing energy security.
  • CO2CRC is Australia’s key designer, initiator, and manager of CCS research. The Otway Research Facility is a world-leading project to demonstrate that CCS is a technically and environmentally safe way to make deep cuts into global greenhouse gas emissions. It’s Australia’s first demonstration of the deep geological storage of CO2 and the world’s largest CCS demonstration project. Lessons learned at the Otway facility are shared with partners around the world.