(Hastings, Australia / Kobe, Japan) – The Japanese government's Green Innovation Fund is investing 220 billion yen (1,52 billion euros) in the "Hydrogen Energy Supply Chain" project (HESC) in the Australian state of Victoria. The funds will go to Japan Suiso Energy (JSE), a company founded in 2021 by Kawasaki Heavy Industries, in which Iwatani Corporation also acquired a stake in 2023.
“Clean” hydrogen from coal
According to the initiators, HESC is intended to produce “clean” liquid hydrogen from a mixture of coal and biomass. The energy source will be liquefied in a plant operated by JSE in the industrial port of Hastings near Melbourne on the southern tip of Australia and then shipped to the Japanese industrial center of Kawasaki.
A newly founded joint venture between J-Power and Sumitomo Corporation (JPSC JV) wants to initially produce 30.000 tons of “clean” hydrogen per year. The coal comes from the Latrobe Valley district in the Gippsland region, where JPSC also wants to produce the hydrogen and then store the captured CO2 in the nearby Bass Strait, the strait between the Australian mainland and the island of Tasmania to the south.
Preparations for commercialization
The latest capital injection will enable JSE to design and build commercial-scale facilities at the port of Hastings, the consortium said. Furthermore, locating hydrogen production in the Latrobe Valley will “act as a catalyst for growth in the Gippsland region” as complementary industries in the ammonia, fertilizer and methanol segments will be attracted, says Jeremy Stone, director of J-Power Latrobe Valley: “We are now moving from the start-up to the scale-up phase.”
Hydrogen Energy Supply Chain Technology Research Association (HySTRA) schematic of the hydrogen supply chain from Australia to Japan. The industrial consortium was founded by the Japanese in 2016 with the aim of developing technologies and demonstration projects that include the realization and commercialization of a CO2-free hydrogen supply chain from production (using lignite) to transport and storage. © Kawasaki Heavy Industries
However, it is “a complex project with a lot of approvals, planning, construction and commissioning still to be done,” says Eiichi Harada, CEO of Japan Suiso Energy. The plan is to start large-scale industrial hydrogen production at the end of this decade.
Test run completed last year
The consortium had already carried out a test run last year. The world's first liquid hydrogen tanker set sail in Hastings in January 2022. The "Suiso FrontierFrom there he headed for Japan and arrived in Kobe in mid-February last year. The hydrogen transported at the time was produced in Latrobe Valley, transported by truck to Hastings, cooled to minus 253 degrees and thus liquefied.
The “Suiso Frontier” set sail from Hastings in January 2022 loaded with liquid hydrogen and arrived in Kobe a good 14 days later. The ship was built specifically to test the process from hydrogen production to unloading the cargo at its destination. In the picture you can see the HESC project managers, still on Australian soil. © HESC
The “Suiso Frontier” was built specifically for the pilot project. In a commercial phase, such liquid hydrogen tankers would be larger and run on carbon-neutral liquid hydrogen (LH2), similar to how liquid natural gas (LNG) tankers run on LNG. The technology to power a ship that crosses the oceans with hydrogen engines is “not yet available, so diesel was the most practical option for the Suiso Frontier for the time being,” a spokeswoman explained in response to our request.
Meanwhile, Kawasaki Heavy Industries, Ltd., Yanmar Power Technology Co., Ltd. and the Japan Engine Corporation have already formed a consortium to jointly develop hydrogen-powered engines "for a wide range of ships as well as a hydrogen fuel storage and supply system." The plan is to bring hydrogen-powered ship engines onto the market by 2025.
The companies involved
At present there can be little doubt that HESC will actually be implemented one day. The project is “too big to fail”, after all, capital-rich industrial giants in Japan are involved.
- Japan Suiso Energy (JSE) was founded in 2021 by Kawasaki Heavy Industries as a company that will undertake research, planning, operations and investment in the global liquid hydrogen supply chain. In 2023, Iwatani Corporation joined to create a world-first global energy supply chain using liquid hydrogen.
- The Electric Power Development Co., Ltd (J-Power) is one of the largest Japanese energy supply companies with a global installed generation capacity of 25 gigawatts. In Japan, their share of renewable energies is 50 percent. J-Power invests in a range of clean energy projects, including pumped storage, wind turbines, biomass, solar energy and clean hydrogen.
- The conglomerate Sumitomo Corporation, one of Japan's largest trading houses with a wide range of activities, is active in areas such as hydrogen, ammonia, forestry, biomass, solar energy, battery storage and carbon capture use and storage (CCUS), among others.
The Green Innovation Fund launched by the Ministry of Economy, Trade and Industry (METI) also still has sufficient capital backing it. The two trillion yen (13,8 billion euros) fund was set up in cooperation with the state research and development organization NEDO (New Energy and Industrial Technology Development Organization) to continuously support industry decarbonization initiatives over a period of ten years .
Carbon intensity as a benchmark
HESC believes the global hydrogen market is moving away from the “color coding of hydrogen production” and towards a “more practical approach”. The carbon intensity of the hydrogen produced, according to the formula “kilograms of CO2 per kilograms of H2”, will be verified using a Guarantee Origin Scheme developed by the Australian government.
This makes it easier to accurately assess the energy source. Customers would then have “the certainty that the production and transport of clean hydrogen meets their requirements for reducing carbon dioxide emissions.”
Photos
The port of Hastings on the southern tip of Australia will in future be the starting point for commercial shipping of hydrogen to Japan. © Port of Hastings
