PERTH (miningweekly.com) – Construction has started on a half-a-billion-dollar pilot hydrogen plant in Victoria that would turn brown coal from the Latrobe Valley into hydrogen, which would then be liquefied for export to Japan.

Minister for Resources and Northern Australia Matt Canavan on Friday said that the pilot hydrogen project had the potential to create a A$2-billion export for Australia.

“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 A$50-million each to the A$500-million project, which is also supported by the Japanese government and Japanese industry,” 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.”

Victoria’s Minister for Economic Development, Tim Pallas, on Friday said that if the decision is made to proceed to commercial scale, the project has the potential to provide low emission hydrogen that can help meet Victoria’s future energy needs, as well as kick-start the emergence of a new, global export industry.

“The hydrogen economy has the potential to be an important future sector in Victoria with the Hydrogen Energy Supply Chain pilot project providing an opportunity for Victoria to lead the global emergence of this industry.”

“The commencement of construction on Australia’s first hydrogen liquefaction and export facility begins Victoria’s quest to become a global leader in hydrogen.”

The pilot project is expected to create 400 jobs across the Victorian supply chain, both in the Latrobe Valley and at the Hastings hydrogen liquefaction facility, and potentially thousands more in the commercial phase.

It will also enable the transfer of knowledge and expertise in the production and utilisation of hydrogen to Victorian companies, Pallas said.

Federal Trade, Tourism and Investment Minister Simon Birmingham said that 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 being developed by a consortium of Japan’s top energy and infrastructure companies, with the full support of the Victorian, Commonwealth and Japanese governments.

The consortium partners include Kawasaki Heavy Industries (KHI), J-Power, Iwatani Corporation, Marubeni Corporation and AGL, with KHI and Iwatani leading the build at the Port of Hastings.