Japan’s Green Innovation Fund selects J-Power/Sumitomo Corporation Joint Venture as preferred hydrogen producer

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

The JV will produce the clean hydrogen, extracted from Latrobe Valley coal with CO2 capture, utilisation and storage (CCUS). J-POWER 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.

Jeremy Stone, Non-Executive Director of J-Power Latrobe Valley said; “Building on the success of HESC and J-Power’s 166MW Osaki CoolGen project, we are excited to be one step closer to making commercial scale hydrogen production in Victoria a reality. This is a major milestone and a recognition of Gippsland’s unique ability to help reduce global CO2 emissions through the reliable production of large quantities of cost competitive and clean hydrogen.”

The Latrobe Valley hydrogen production facility will benefit from the local skilled workforce, existing energy infrastructure and resources. 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.

Japan Suiso Energy CEO, Dr. Eiichi Harada said, “We are delighted to have selected the JPSC JV as the preferred supplier of clean hydrogen for the Japanese energy market as we continue our transition to a more sustainable clean energy future. We have received a commitment of JPY220 billion (AUD$2.1 billion) from the Japanese Government’s Green Innovation Fund to further progress this opportunity. We look forward to working with the JV and the Victorian, Australian and Japanese governments to achieve the significant economic and emission reduction benefits that a commercial scale clean hydrogen project will deliver.”

The JPSC JV 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 2020’s.

Jeremy Stone said, “There is significant domestic interest in a reliable source of locally produced, cost competitive clean hydrogen. Now we have countries establishing the definition of “clean hydrogen”, based on carbon intensity, we are seeing an opening of trade, based on credible and transparent CO2 reduction numbers, at various price points. We are expecting further offtake agreements for hydrogen, that can be used by a wide range of businesses and industrial processes, including the production of ammonia, fertiliser and methanol.”


It is intended to establish an Australian joint venture between Japan’s J-Power and Sumitomo Corporation.

Electric Power Development Co., Ltd (J-Power) is one of Japan’s largest power utility companies with some 25GW of global energy generation. J-Power is 50% renewable in Japan and invest in a range of clean energy projects around the world, including pumped hydro, wind, biomass, solar and hydrogen. J-POWER (jpower.co.jp) 

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. www.sumitomocorp.com/en/jp

About Carbon Capture Utilisation and Storage (CCUS)

There are two carbon storage options in Gippsland under consideration, CarbonNet and ExxonMobil affiliate operated Gippsland Basin Joint Venture South East Australian Carbon Capture Storage Hub . 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. According to the Global Carbon Capture and Storage Institute, over the past 45 years, 32 projects have been built and there are some 204 CCS projects under various stages of development around the world.

About Clean hydrogen, carbon intensity and the Guarantee of Origin Scheme

The global hydrogen market is moving away from colour coding hydrogen production to a more practical approach – carbon intensity (kg CO2e per kg H2). The hydrogen produced by the JPSC JV will comply with the Guarantee Origin Scheme for hydrogen being developed by the Australian Government in-line with global hydrogen markets. The scheme will provide certainty to customers that production of hydrogen meets their definition of clean hydrogen, and their own CO2 emission reduction requirements. Japan is currently proposing a clean hydrogen carbon intensity of less than 3.4kg.

About Japan Suiso Energy (JSE)

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 the HESC pilot project

In January 2022, the Hydrogen Energy Supply Chain (HESC) Pilot Project achieved a world first by successfully demonstrating a complete liquid hydrogen supply chain. Located in Gippsland, Victoria, hydrogen was extracted from a mix of Latrobe Valley coal and biomass, liquified at the Port of Hastings, shipped and unloaded in the Port of Kobe, Japan. www.hydrogenenergysupplychain.com

About Japan’s Green Innovation Fund (GIF)

Based on Japan’s 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 decarbonisation initiatives, ranging from R&D and demonstration to social implementation, with specific goals shared between the public and private sectors. From this amount, JSE received a commitment of JPY220 billion (AUD$2.1 billion), to assist in the establishment of a liquid hydrogen supply chain.

For enquiries, contact:

Johnny Sollitt-Davis, Dentsu Creative Public Relations

Tel: 0431 134 850

[email protected]

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