Japan commits AUD$2.1 billion to establish world’s first liquefied hydrogen supply chain

Australia’s most advanced clean hydrogen project, the Hydrogen Energy Supply Chain (HESC) project in Victoria, has entered the commercial demonstration phase with the commitment of JPY220 billion approximately AUD$2.1 billion, 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 tonnes of clean hydrogen gas per year, 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 hydrogen 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 hydrogen 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 hydrogen energy supply chain have been rewarded. This is truly a watershed moment for our combined efforts to decarbonise global energy production. This commitment of AUD$2.1 billion gives all participants in the hydrogen supply chain the confidence to progress to the next stage of commercialisation.”

“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 hydrogen production to the Latrobe Valley will act as a catalyst for growth in the broader Gippsland region, as complementary industries such as Ammonia, Fertiliser 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 hydrogen. 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 hydrogen production will commence by late 2020s.”

Carbon intensity

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

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

Additional background information:

About HESC

In January 2022, the Hydrogen Energy Supply Chain (HESC) pilot Project achieved a world first by demonstrating that clean liquid hydrogen can be extracted from a mix of Latrobe Valley coal and biomass, liquified, shipped and unloaded in the port of Kobe in Japan.

The governments of Australia and Victoria contributed a combined $100 million in funding to the $500 million project. The rest was invested by the Japanese Government and Project Partners.


About Japan Suiso Energy

Japan Suiso Energy (JSE) was established by Kawasaki Heavy Industries in 2021 as a company that will take research, planning, operation, and investment in the global supply chain of liquefied hydrogen. In 2023, Iwatani Corporation joined JSE, to create a world first global energy supply chain using liquefied hydrogen and contribute to the realisation of a sustainable decarbonised society.

About J-POWER / Sumitomo Corporation Joint Venture (JPSC JV)

A joint venture between J-Power and Sumitomo Corporation, two large Japanese organisations will provide the hydrogen gas. J-Power (Electric Power Development Co., Ltd) is one of Japan’s largest power utility companies with some 25GW of global energy generation. They are 50% renewable in Japan. J-Power invests in a range of clean energy projects around the world, including pumped hydro, wind, biomass, solar and clean hydrogen.

Sumitomo Corporation is one of the largest trading houses in Japan with a wide variety of business activities including sales of products and services, import and export, trilateral trade, and domestic and international business investment. Aiming to create a next-generation business that will contribute to carbon-neutral society, Sumitomo Corporation is engaged in the business development in the field such as hydrogen, ammonia, forest, biomass, solar power, storage battery, subsurface energy, carbon credit, and CCUS.

About the Green Innovation Fund

Based on the Green Development Strategy, the Ministry of Economy, Trade and Industry (METI) launched the Green Innovation Fund Project, a JPY 2 trillion (around USD 16 billion) fund set up with the New Energy and Industrial Technology Development Organization (NEDO) to provide 10 years of continuous support to business-led decarbonization initiatives, ranging from R&D and demonstration to social implementation, with specific goals shared between the public and private sectors.

For further information:

Johnny Sollitt-Davis, Dentsu Creative Public Relations

Tel: 0431 134 850

[email protected]

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