HESC is an advanced project that will produce and safely export liquid hydrogen from the Latrobe Valley in Victoria to Kobe, Japan.

The project can create 30,000 tonnes of hydrogen gas every year and has the potential to significantly benefit Victoria’s export industry and create thousands of local jobs.

The project will receive funding of about A$2.35 billion for the next stage of development from the Japanese Government’s Green Innovation Fund.

The HESC Pilot Project achieved a world-first delivery of hydrogen in Japan in February 2022. With the latest announcement, it will provide the foundation for Victoria to become one of the world’s biggest exporters of hydrogen, estimated to be a sector worth $2 trillion by 2050.

The project

As part of the HESC project, a newly formed J-POWER and Sumitomo Corporation Joint Venture (JPSC JV) will supply 30,000 tonnes of hydrogen gas per year to a liquefaction and shipping facility at the Port of Hastings.

The project will build the skills and capability for large-scale local hydrogen production, liquefaction and supply chains that will support the growth of the hydrogen sector to scale up exponentially in the coming decade.

Japan Suiso Energy CEO, Dr. Eiichi Harada 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. This commitment of AUD$2.35 billion gives all participants in the hydrogen supply chain the confidence to progress to the next stage of commercialisation.”

Project benefits

The project will help reduce atmospheric carbon emissions on the path to net-zero by 2045 and, at full commercial scale, will create new jobs and provide economic opportunities for the region.

The Latrobe Valley hydrogen production facility and subsequent promotion of local supply chains will boost Victorian industry and provide an avenue for onshore key chemical manufacturing industries to source affordable clear hydrogen and decarbonise their processes.

HESC’s future potential production is estimated to be 225,000 tonnes per year. This would reduce about 1.8 million tonnes of CO2 from being released into the atmosphere, equivalent to the emissions of about 350,000 petrol cars each year.

J-POWER Latrobe Valley Non-Executive Director Jeremy Stone said: “We are moving from start up to scale up phase, which is an exciting time for J-POWER and our joint venture partner, Sumitomo Corporation.

“Bringing commercial scale hydrogen production to the Latrobe Valley will act as a catalyst for growth in the broader Gippsland region, as complementary industries such as Ammonia, Fertiliser and Methanol are attracted to the opportunities it presents.

“Gippsland presents a unique opportunity to help reduce global CO2 emissions through the reliable production of large quantities of cost-effective clean hydrogen. Beyond the abundance of natural resources, the area has unrivalled access to a skilled workforce, major energy infrastructure and viable long-term storage for captured CO2 in the Bass Strait.”

Subject to commercial agreements and environmental permits and approvals, it is expected hydrogen production will commence by the late 2020s.

Energy advocacy

The announcement aligns with the Victorian Chamber’s energy roadmap, ‘Achieving a Net-Zero Economy: Roadmap for Victorian Businesses.’

The transition to net-zero presents a unique opportunity for industry and the State Government to take an active leadership role in lowering the State’s carbon emissions while seizing economic opportunities during the transition.

Victorian Chamber Chief Executive Paul Guerra said: “The Victorian Chamber welcomes the Japanese Government’s announcement that Victoria is the preferred location for the Hydrogen Energy Supply Chain project.

“In our recently published roadmap, ‘Achieving a Net-Zero Economy: Roadmap for Victorian Businesses’, we highlighted the need for hydrogen production and to prioritise international partnerships and exports.

“This is a huge vote of confidence in the La Trobe Valley and, as the project enters its commercial demonstration phase, it will provide significant investment and jobs. It will give Victoria a head-start in furthering our hydrogen industry and developing the skills required as we transition to a net-zero economy.

“This not only demonstrates the strength of Japanese and Victorian relations but importantly presents a significant opportunity and highlights that Victoria not only has the natural resources but also the expertise to become one of the world’s biggest hydrogen exporters.

“Importantly it will enable our energy industry and provide opportunities for the creation of new jobs, boost our regional communities and signal to the world to invest in Victoria.”