HESC Project Milestone: Hydrogen Gas now Produced at Latrobe Valley Site

By February 15, 2021 8   min read  (1514 words)

February 15, 2021 |

fuelcellsworks, HESC Project Milestone: Hydrogen Gas now Produced at Latrobe Valley Site

HESC Project Partners are proud to announce that hydrogen gas is successfully being produced from Latrobe Valley coal as part of the world-first Hydrogen Supply Chain Pilot Project

This is a crucial project milestone as it means hydrogen gas can soon be transported by truck to an Australian first liquefaction and loading terminal at the Port of Hastings, where the hydrogen gas will be liquefied and stored.  Following this process, the liquid hydrogen will be transported by a specially designed hydrogen marine carrier ship to Kobe, Japan.

This milestone is a step closer to achieving a global energy transition to lower emissions via using hydrogen as a fuel — the fuel of the future.

The pilot project is delivered by experienced Japanese and Australian industry partners and supported by the Victorian, Australian and Japanese Governments.

About HESC

The world-first Hydrogen Energy Supply Chain (HESC) Project aims to safely produce and transport clean liquid hydrogen from Australia’s Latrobe Valley in Victoria to Kobe in Japan. A key objective of the pilot project is to demonstrate an end-to-end supply chain between both countries.

Hydrogen is a clean-burning fuel with a range of uses, from powering vehicles to storing energy. Hydrogen can make a significant contribution to the required transition to clean energy by replacing existing fuels and reducing COemissions by many gigatonnes and across a broad range of applications. Read more about why hydrogen is a fuel of the future here.

The project has the potential to be a game-changer – providing an innovative, economically viable and environmentally conscious solution to producing clean hydrogen safely, through gasification of coal with carbon capture and storage (CCS).

The HESC Project is being developed in two phases, beginning with a pilot, which aims to demonstrate that hydrogen can be produced using Latrobe Valley coal and transported to Japan.

Key elements of the pilot supply chain include:

  • Hydrogen is produced from coal at a newly constructed plant located at AGL’s Loy Yang Complex in the Latrobe Valley through a coal gasification and gas-refining Carbon offsets have been purchased to mitigate emissions from the pilot. In the commercial phase, carbon dioxide would be captured during this process and stored deep underground in a process known as carbon capture and storage (CCS).
  • The hydrogen gas is transported by truck to a liquefaction and loading terminal at the Port of Hastings, the first of its kind in Australia.
  • The hydrogen gas is liquefied and then loaded on to a specially designed marine carrier for shipment to Japan.

The decision to progress to a commercialisation phase, which will produce clean hydrogen from coal with CCS, will be made after the pilot project is completed.

Climate change is a massive global threat that requires us to pursue a range of clean energy options, now.

We are pursuing hydrogen from coal with CCS because producing hydrogen through electrolysis is currently more expensive. Additionally, a commercial HESC Project can expand and produce hydrogen at the scale needed to meet growing global hydrogen demand. Clean hydrogen from HESC will also contribute to emissions reductions, reducing global CO2 emissions by 1.8 million tonnes per year (equivalent to the emission of about 350,000 petrol-driven cars), while paving the way for renewable hydrogen projects.

The current HESC Pilot Project is creating approximately 400 jobs across the Victorian supply chain. It has the potential for thousands more in the commercial phase, including in a region in an economic transition.

Australia could be the first country to create a thriving hydrogen export industry with huge local economic benefits and contribute to global environmental goals. The HESC Project will also help develop critical infrastructure, sustainable jobs, and in-demand skills in Australia. These are crucial ingredients for a clean hydrogen market.

The pioneering pilot project is delivered by a partnership between Japanese and Australian experienced industry partners supported by the Victorian, Australian and Japanese Governments.

HESC Timeline

  • 2017 to 2018 Planning and Approvals: Front end engineering and design (FEED). Regulatory approvals and engagement with local communities.
  • 2019 to 2020 Pilot Construction: Detailed design and construction of pilot facilities to commence from 2019.
  • 2020 to 2021 Pilot Operations: Pilot: Pilot operations and delivery of hydrogen to Japan.
  • 2020s to 2030s Technical Reviews and Commercial Operations: The decision to proceed to a commercial phase will be made in the 2020s with operations targeted in the 2030s depending on the successful completion of the pilot phase, technical readiness, financial viability, regulatory approvals, social licence to operate and hydrogen demand.

HESC Partners

The pioneering project is being delivered by a partnership between Japanese and Australian experienced industry partners and supported by the Victorian, Australian and Japanese Governments.

The consortium of industry partners from Japan and Australia includes Kawasaki Heavy Industries, Ltd (KHI), Electric Power Development Co., Ltd. (J-POWER), Iwatani Corporation (Iwatani), Marubeni Corporation (Marubeni), AGL Energy (AGL) and Sumitomo Corporation (Sumitomo). Royal Dutch Shell (Shell), ENEOS Corporation and Kawasaki Kisen Kaisha, Ltd. (K-Line) are also involved in the Japanese portion of the project.

Kawasaki Heavy Industries (KHI)

KHI has over a century of experience in research, development and innovation across energy, transport, shipping, submarines, aerospace, precision machinery and industrial robots.

KHI has already designed and built storage tanks used to hold hydrogen rocket fuel, as well as a ground-breaking pilot hydrogen liquefaction plant.

Hydrogen is a key focus of KHI’s Corporate Strategy. Its main interest in hydrogen is to supply equipment and facilities for transportation, liquefaction and power generation.

Read more about KHI:


J-POWER is one of Japan’s largest utility companies with a combined generation capacity of some 25GW, made up of about 50% renewables in Japan.

Globally they are investing in a range of clean energy projects, including wind, solar, pumped hydro, biomass and hydrogen.

J-POWER’s main focus for the HESC Project is coal gasification, refining and carbon capture and has established J-POWER Latrobe Valley to implement the project.

Read more about J-POWER:

Iwatani Corporation

Iwatani Corporation is a large-scale supplier of gas energy and currently supplies liquid petroleum gas (LPG) to 3.2 million households across Japan.

Iwatani Corporation initiated operations at Japan’s first commercial liquefied hydrogen plant in 1978 and is Japan’s only producer and supplier of liquid hydrogen (LH2).

Iwatani Corporation’s main focus on the HESC project will be the handling and retail of hydrogen.

Read more about Iwatani Corporation:

Marubeni Corporation

Marubeni Corporation is a major integrated trading and investing business, active in a broad range of products and services globally.

Its global activities encompass importing and exporting, as well as transactions in the world market across a number of business sectors.

On HESC, Marubeni Corporation will be focussing on trading a new commodity and infrastructure investment opportunities.

Read more about Marubeni:


AGL plays a critical role in the HESC pilot phase by providing the site for the pilot gasification plant, raw brown coal, and other services.

Proudly Australian for more than 180 years, AGL supplies around 4.2 million services to customers, including energy, phone and broadband services.

AGL operates the largest electricity portfolio in the National Electricity Market made up of traditional coal and gas-fired generation, and renewables such as wind, hydro and solar. AGL is focussed on developing flexible supply, building on its history as Australia’s leading private investor in renewable energy, to support the transition to a new energy system and has a relentless determination to make things better for its communities, customers, the Australian economy and our planet.

Read more about AGL:

Sumitomo Corporation

Sumitomo Corporation is leading communicating with the CarbonNet Project throughout the HESC pilot phase. Funded by the Australian and Victorian Governments, CarbonNet is investigating the potential for establishing a commercial-scale carbon capture and storage (CCS) network in Victoria’s Latrobe Valley and is a critical enabler of HESC moving to a commercial phase.

Read more about Sumitomo Corporation:

HESC Governance

For funding purposes, the pilot phase is split into different delivery portions – a Japanese funded portion and an Australian funded portion.

The Australian funded portion is coordinated by Hydrogen Engineering Australia (HEA), a consortium comprised of KHI, J-POWER, Iwatani, Marubeni, AGL and Sumitomo. HEA is a 100 per cent subsidiary of KHI. The Australian and Victorian Governments are providing funds to the Australian portion.

Hydrogen Engineering Australia (HEA) has established an office in Melbourne to administer the project locally.

J-Power Latrobe Valley Pty Ltd (JPLV) is based in Traralgon to manage the Latrobe Valley components of the project. JPLV is a subsidiary of J-Power.

The Japan funded portion of the HESC pilot phase is coordinated by the CO2-Free Hydrogen Supply Chain Technology Association (HySTRA), acting on behalf of KHI, J-POWER, Iwatani, Shell, Marubeni, ENEOS Corporation and Kawasaki Kisen Kaisha, Ltd. (“K” LINE). The Japanese funded portion includes converting coal to gas in the Latrobe Valley, transporting liquefied hydrogen by sea and then unloading it in Japan. The Japanese Government is providing funds to the Japanese portion.


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