Top view of waves crashing on a deserted beach


HESC cares about the environment and strives to work with local stakeholders in order mitigate any potential environmental concerns. To speak to a member of our project team, please contact us.

HESC could produce

tonnes of hydrogen per year

Reducing CO2 emissions by
1.8 million

tonnes per year

Equivalent to taking

petrol engine cars off the road


Hydrogen is a clean gas that produces only water when used as fuel for cars, heavy transport, power generation and industry.  Extracting hydrogen from Latrobe Valley coal and a mix of biomass in a large, central facility means pollution control can be put in place. Carbon dioxide can be removed from the hydrogen gas stream very efficiently.

During the pilot phase, hydrogen was extracted from Latrobe Valley coal and biomass at a newly constructed plant located at AGL’s Loy Yang Complex in the Latrobe Valley through a gasification and gas-refining process. During the pilot phase, carbon emissions from the project were very low. Carbon offsets were purchased to mitigate these emissions. In the commercial phase, carbon dioxide would be captured during this process and stored deep under-ground in a process known as carbon capture and storage (CCS).

Australia is taking the lead in developing a Certificate of Origin for clean hydrogen and the Hydrogen Energy Supply Chain (HESC) Project is contributing to shaping these standards. The scheme will cover emissions released in the atmosphere as a result of the hydrogen production process. It will avoid misunderstanding and provide consumers with transparency around the environmental impacts of the hydrogen. Read more about the scheme here.

HESC’s Carbon Credits

The HESC Project purchased carbon credits for 2,905 tonnes of CO2 emissions. This represents the CO2 emissions from the Australian arm of the pilot phase, including direct CO2 emissions from H2 extraction from Latrobe Valley coal and biomass mix through gasification, road transport of gaseous hydrogen, and emissions associated with electricity in the Latrobe Valley and Port of Hastings facilities.

The HESC Project entered into an arrangement with South Pole to invest in Australian Carbon Credit Units (ACCUs). ACCUs are issued by the Clean Energy Regulator. The units HESC purchased are contributing to a ‘human induced’ vegetation regeneration initiative in rural Australia: the Boobera Carbon Project in Queensland.  This is fully offsetting the emissions from the HESC Pilot project, ensuring the project can support a low-carbon future in Australia from its pilot phase.

If the HESC Project proceeds to commercialisation, it will utilise a Carbon Capture & Storage (CCS) solution, with the CO2 storage deep below the seabed in the Gippsland Basin. Rather than entering the atmosphere, CO2 emissions will be safely stored in depleted oil and gas reservoirs 1.5 kilometres beneath Bass Strait, similar to the way oil and gas has been trapped naturally for millions of years.

In addition, for each year it operates at commercial scale, the HESC Project could produce 225,000 tonnes of hydrogen. Using CSIRO data, we estimate this could reduce global CO2 emissions by 1.8 million tonnes per year when compared to current hydrogen production processes, equivalent to the emissions of 350,000 petrol engine cars.

Carbon Capture and Storage (CCS)

Carbon capture and storage (CCS) is a process where carbon dioxide (CO2) from industrial processes is captured and stored securely in naturally occurring rock formations deep underground—these formations or reservoirs, are now depleted and once stored oil and gas for millions of years.

If the HESC Project proceeds to commercialisation, it will utilise a CCS solution, such as the joint Federal and Victorian Governments’ CarbonNet Project.

CarbonNet has been in development for more than 10 years and can store more than 4mTonnes CO2 per year, with an estimated storage capacity of 31 giga tonnes of CO2 under the Bass Strait – about as much as annual global CO2 emissions.

Around 27 CCS facilities have been built and safely operated over the past 45 years. In addition, there are now some 135 CCS projects in various stages of development around the world. Australia is home to the largest dedicated geological storage CCS facility in the world – which can store up to 4mt of C02 per year.

The International Energy Agency (IEA) and many other groups estimate CCS projects must mitigate 1.5 Gigatonnes per annum by 2030 to stay on a 1.5°C increase climate trajectory—an increase by a factor of 35 from today.


When it comes to local environmental concerns these are as important as tackling climate change. We continue to take steps to identify and mitigate any local environmental issues by listening to local concerns and the voices of experts in Australia and internationally.

In the Latrobe Valley and Hastings, local environmental, safety and, health implications of this pilot project have been considered and mitigation measures are in place. Our FAQ page contains information on why negative environmental impacts are not expected.  The HESC Project is being operated in line with the regulations and approvals of Australian Government, Environmental Protection Authority (FDA) and the Port of Hastings Development Authority (PoHDA), ensuring environmental safety.

For a commercial project, the regulatory approvals process provides an integrated and transparent assessment of the proposed project and its impacts. Information is available to the public throughout the process with multiple opportunities for community consultation and formal input.

The HESC Project has potential to be the cornerstone of Australia’s hydrogen future and a key contributor to global greenhouse gas emission reductions.  For each year it operates at commercial scale, the HESC Project could produce 225,000 tonnes of hydrogen. Using CSIRO data, we estimate this could reduce global CO2 emissions by 1.8 million tonnes per year, equivalent to taking 350,000 petrol engine cars off the road.