A world-first project to create a global supply chain for hydrogen

A consortium of leading energy and infrastructure companies have partnered with the Japanese Government and the Commonwealth and Victorian governments to demonstrate a world-first, innovative supply chain for the delivery of liquefied hydrogen to Japan.

Countries all over the world face challenges to address energy security, while also reducing emissions, as part of a global push to tackle climate change. According to the International Energy Agency, hydrogen has been identified as the clean energy supply and commodity of the future – it is seen as a credible solution to the world’s energy and climate change problems.

Japan has led the world in the move to a hydrogen economy, and has identified Australia as the ideal partner for hydrogen imports to meet its future energy needs.

After several years of collective efforts, we are pleased to announce the pilot phase of the Hydrogen Energy Supply Chain (HESC) Project is ready to move from concept to reality. The project will demonstrate the viability of producing hydrogen, in Victoria, for export to Japan. The first shipment of hydrogen, from the pilot, is scheduled for 2020-2021.

If the pilot phase is successful, the HESC Project will enter its commercial phase in the 2030s.This multi-billion dollar investment will establish an integrated supply chain for environmentally sustainable hydrogen, produced from Victorian brown coal, in the Latrobe Valley.

Leveraging Victoria’s Carbon Capture and Storage (CCS) infrastructure will be paramount for the commercial phase. Project partners, including governments, have stated that a CCS solution is critical to the HESC Project, to ensure the supply of low-emissions hydrogen.

Project partners remain confident that the economics of hydrogen in Japan will make the commercial phase viable, and necessary to satisfy the country’s growing hydrogen demand, mostly for mobility and power generation. In Australia, the consortium is led by Kawasaki Heavy Industries, a leading Japanese company in the manufacture of transportation systems, industrial plants and energy solutions.

The project brings together J-POWER, a key electricity generator and distributor in Japan, and a leading player in gasification technologies, Iwatani Corporation, a leading provider of hydrogen in Japan, and Marubeni Corporation, a global trading and investing business conglomerate. AGL, Australia’s largest energy provider, is also a key partner to deliver the project in the Latrobe Valley.

“The global hydrogen market is booming and we are thrilled that both the Victorian and Commonwealth governments wish to participate actively in this project, which has the potential to deliver a critical option for future global energy needs” Dr Eiichi Harada (KHI) said.

“We are also eager to maximise the synergy between the HESC Project and the Victorian Government’s strategy for future uses of brown coal. Community engagement will be ongoing to provide local communities with further information on the project.”

Construction of the pilot facility is expected to commence in early 2019, following planning approvals.

Background information
  • While still subject to various negotiations and rigorous approvals, the Australian components of a pilot supply chain would include: (1) the conversion of brown coal to hydrogen gas in the Latrobe Valley, (2) the liquefaction of the gas in the Port of Hastings area, and (3) storage and loading of the liquefied hydrogen onto a special-purpose built carrier, for shipping to Japan.
  • The HESC Project team must first prove that the integration of these various hydrogen supply chain elements can be successfully demonstrated, before moving on to a larger commercial-scale operation.
  • To date, the HESC project team has completed the Front End Engineering and Design work.
  • Kawasaki Heavy Industries is committed to working with local communities and integrating environmental, safety and social considerations from the outset, and for the long-term. It has undertaken to release project details throughout 2018 for consideration and consultation.
  • Global demand for hydrogen is growing rapidly. According to the Hydrogen Council, hydrogen could supply up to a fifth of global energy needs by 2050, and generate a market worth US$2.5 trillion by 2050.
  • Hydrogen is seen as the clean energy fuel of the future, to help address the need to diversify energy mix and dramatically reduce carbon emissions. It is seen as a credible solution to the world’s energy and climate change problems.
  • Kawasaki Heavy Industries invests globally in projects that have the highest possible standards of environmental sensitivity, safety and technological innovation.
  • Only certain countries – like Australia – have the capacity to produce large amounts of hydrogen. Australia’s large brown coal reserves, such as those in Victoria’s Latrobe Valley, have the potential to create a new hydrogen export industry.
For further information, contact:

Brooke Maki
Group Manager – Communication
GHD Australia
Phone: 0409 641 535
Email: [email protected]

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