A world-first initiative which will build a pilot plant to produce hydrogen (H2) from Australian brown coal for export to Japan has launched its pilot phase.

The Australian, Japanese and Victorian governments have joined forces with a consortium of leading energy and infrastructure companies to create the Hydrogen Energy Supply Chain (HESC) project. By working together, all partners hope to put Australia and Japan at the forefront of H2 technologies.

After several years of collective efforts, HESC has announced today the pilot phase of the project is ready to move from concept to reality. It will demonstrate the viability of producing H2, in Victoria, for export to Japan. The first shipment of H2 from the pilot is scheduled for 2020 to 2021.

If the pilot phase is successful, the HESC project will enter its commercial phase in the 2030s. This multi-billion dollar investment will establish an integrated supply chain for environmentally sustainable H2, produced from Victorian brown coal, in the Latrobe Valley.

Leveraging Victoria’s Carbon Capture and Storage (CCS) infrastructure will be paramount for the commercial phase. Project partners, including governments, have stated that a CCS solution is critical to the HESC Project, to ensure the supply of low-emissions H2.

Project partners remain confident that the economics of H2 in Japan will make the commercial phase viable, and necessary to satisfy the country’s growing H2 demand, mostly for mobility and power generation. In Australia, the consortium is led by Kawasaki Heavy Industries, a leading Japanese company in the manufacture of transportation systems, industrial plants and energy solutions.

The project brings together J-POWER, a key electricity generator and distributor in Japan, and a leading player in gasification technologies, Iwatani Corporation, a leading provider of H2 in Japan, and Marubeni Corporation, a global trading and investing business conglomerate. AGL, Australia’s largest energy provider, is also a key partner to deliver the project in the Latrobe Valley.

“The global H2 market is booming and we are thrilled that both the Victorian and Commonwealth governments wish to participate actively in this project, which has the potential to deliver a critical option for future global energy needs,” Dr. Eiichi Harada, Kawasaki Heavy Industries Executive Officer, said.

“We are also eager to maximise the synergy between the HESC Project and the Victorian Government’s strategy for future uses of brown coal. Community engagement will be ongoing to provide local communities with further information on the project.”

Construction of the pilot facility is expected to commence in early 2019, following planning approvals.