Half-billion hydrogen energy project underway in Victoria

Construction has started on a half-billion dollar pilot hydrogen project which has the potential to create $2 billion in exports for Australia.

Works began on liquefaction facilities linked to the Hydrogen Energy Supply Chain (HESC) project at Port Hastings in Victoria, which will look at the feasibility of turning brown coal from the Latrobe Valley into hydrogen, which would then be liquefied and exported to Japan.

Minister for Resources and Northern Australia Matt Canavan said today’s sod turn symbolised new job and investment opportunities for the region, as well as the nation.

“Australia is well placed to become a global leader in hydrogen production and this pilot project is a crucial step towards making this vision a reality. The Australian and Victorian Governments have committed $50 million each to the $500 million project, which is also supported by the Japanese Government and Japanese industry,” Minister Canavan said.

“This project promises to be of huge benefit to both nations and particularly the state of Victoria, which has the opportunity to develop an alternative and value-adding use of its abundant brown coal reserves in the Latrobe Valley.

“The use of hydrogen is part of Japan’s vision of a clean energy future and any emissions from the pilot project will be fully offset, with commercial scale operations required to use carbon capture and storage to ensure a low emission source of hydrogen.”

Minister for Trade, Tourism and Investment Simon Birmingham said the project was the first of its kind in Australia and was built on the strong and long-standing trade partnership between Australia and Japan.

“This pilot project is the first step in creating a commercial scale hydrogen supply chain which could lead to billions of dollars in export earnings for Australia and help Japan meet its strategic energy targets for 2030 and beyond,” Minister Birmingham said.

“As global demand for hydrogen continues to grow, strategic investments such as this one have the potential to turn Australia into a major global exporter of hydrogen, particularly to countries such as Japan and South Korea.

“Australia has long been a reliable supplier of energy needs and there is no doubt that we are uniquely placed to continue to meet those global needs by becoming a leader in hydrogen energy. Future commercial scale operations in the Latrobe Valley and around the country will help transform Australia into a hydrogen powerhouse, delivering significant economic benefits and thousands of extra jobs for Australians.”

The project is a down payment on our future economic prosperity and security and will be delivered by a consortium of Japanese energy and infrastructure companies led by Kawasaki Heavy Industries.