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

3/8/2023

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$2.35 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.”