Developers of the Hydrogen Energy Supply Chain (Hesc) project have reportedly shifted plans to source hydrogen domestically in Japan, amid prolonged delays encountered with Australian authorities.
The project was being led by two consortiums, with J-Power and Sumitomo Corporation planning to produce up to 30,000 tonnes of hydrogen per year from Latrobe Valley coal with carbon capture in the Bass Strait. KHI and Iwatani’s Susio Energy would purchase the hydrogen and handle liquefaction at Hastings before exporting to Japan.
The Japanese Government had pledged over $1.4bn to Hesc’s commercial development to ensure it’s completed by 2030. However, the project has now been relocated to Japan to meet this deadline and remain competitive.
The AFP reported that a representative of Kawasaki Heavy Industries (KHI) claimed the decision was made “because of delay in procedures of the Australian side.”
Last year, local reports suggested that KHI had ended its participation altogether with the Australian partners, after announcing that it would downsize its hydrogen tanker the Susio Frontier from 160,000 cubic metres to 40,000 to better align with market demand.
H2 Intelligence demand data
The HESC pilot project, completed in February 2022, reportedly demonstrated the feasibility of producing blue hydrogen in Victoria, Australia, for liquefaction and export to Japan. However, plans for Australian-based production and liquefaction at Hastings now appear to have been shelved.
According to data from GWGI’s H2 Intelligence platform, Australia’s domestic hydrogen demand is significantly smaller than other global markets, making exports essential to its green hydrogen ambitions – with a stretch target of 30 million tonnes by 2050.
H2 Intelligence data has shown that numerous large-scale hydrogen projects will be located close to port operations in the country. However, several flagship projects in Australia are faltering, such as project Hesc and CQ-H2.
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