Japan invests $1.6 billion in coal-to-hydrogen conversion project

In a further indication of the emergence of hydrogen into the energy mainstream, Japan is investing 220 billion yen ($1 billion plus) into a project to turn coal from Victoria’s Latrobe Valley into hydrogen using carbon capture and storage technology.

Led by Kawasaki Heavy Industries, the Hydrogen Energy Supply Chain (HESC) project is backed by Japan and Australia as a way to switch to cleaner energy and cut carbon emissions.

Under the HESC project, Electric Power Development (J-Power) and Sumitomo Corp will produce hydrogen through coal gasification using carbon capture and storage (CCS) in Gippsland, Victoria.

KHI and Iwatani will oversee the liquefaction, loading, transportation and unloading of hydrogen to Japan.

The 220 billion yen fund will come from the Japanese government’s Green Innovation Fund and will be channelled into one of its partners, Japan Suiso Energy that will own and operate a liquefaction and shipping facility at the Port of Hastings.

Eiichi Harada, CEO of Japan Suiso Energy, 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.”

J-Power and Sumitomo plan to initially produce between 30,000 to 40,000 tonnes per annum of gaseous clean hydrogen, with a future potential production of 225,000 tonnes per annum.

Subject to commercial agreements and meeting the required environmental permits and approvals, they aim to start production in late 2020’s.