The Hydrogen Energy Supply Chain (HESC) project, which initially planned to ship coal-derived blue hydrogen from Australia to Japan, will now source domestically produced hydrogen instead.

Japan Suiso Energy (JSE)—a joint venture (JV) between Japanese multinational Kawasaki Heavy Industries and industrial gases company Iwatani Corporation, and a key partner in HESC—will now conduct its commercial demonstration phase entirely in Japan.

“This change is to remain aligned with the condition of the Japanese Government Green Innovation Fund that the commercial demonstration phase must be completed by end of Japanese fiscal year 2030,” a spokesperson for HESC told Hydrogen Economist.

“The commercial demonstration phase must be completed by end of Japanese fiscal year 2030” HESC

JSE initially planned to design and build facilities to liquefy hydrogen at the Australian port of Hastings, completing a trial shipment of liquid hydrogen between the port and Kobe in early 2022 on a vessel specially designed by Kawasaki Heavy Industries.

JPSC, a JV of Japanese power generator J-Power and conglomerate Sumitomo, planned to produce hydrogen extracted from coal deposits in Australia’s state of Victoria, storing CO₂ emissions using CCS technology.

The project received A$50m ($32m) each from the Victorian state and Australian federal governments, and A$2.35b ($1.5b) from the Japanese government.

But concerns the Australian part of the supply chain would not become operational in time for the demonstration phase to be completed before the 2030 deadline have now led to a change in sourcing strategy.

Hitting strategy targets

The Japanese Government Green Innovation Fund—known as Nedo—has been capitalised with ¥2t ($131m) to support projects that can help Japan achieve carbon neutrality by 2050.

The hydrogen supply chain branch of Nedo has a budget of up to ¥315b and aims to reduce CO₂ emissions by 7mt/yr by 2030 and 400mt/yr by 2050 by importing hydrogen to co-fire in power plants, displacing natural gas.

Japan still plans to eventually source hydrogen via international trade. It recently established a separate Japan Hydrogen Fund with initial capital funding of $400m to develop technologies to assist with creating a global hydrogen supply chain.

JSE may still source hydrogen from Australia or other parts of the globe in the future, but for the near-term plans to use smaller liquefied hydrogen carriers with a capacity of 40,000cm to ship domestic supply—much smaller than the originally planned vessels, which would have had capacity of 160,000cm.

Kawasaki heavy Industries signed an agreement with storage tank suppler CB&I in September to work together on developing a commercial-scale international hydrogen supply chain.

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Author: Tom Young