MELBOURNE, March 12 (Reuters) - A Japanese-Australian venture has begun producing hydrogen from brown coal in a A$500 million ($387 million) test project that aims to show liquefied hydrogen can be produced and exported safely to Japan, the project sponsors said on Friday.
Japan’s Kawasaki Heavy Industries is running the pilot project with government financial support from both Japan and Australia in the state of Victoria, home to a quarter of the world’s known brown coal reserves.
The project is key to helping Japan meet its target of net zero carbon emissions by 2050. The world’s fifth-largest energy consumer aims to boost its annual hydrogen demand tenfold to 20 million tonnes by 2050, equivalent to about 40% of its current power generation.
At the same time, Australia is pushing to become a major hydrogen exporter, eventually rivaling its dominance in global liquefied natural gas (LNG) trade, which could potentially give it a greener market for its coal and gas.
Brown coal is considered the lowest rank of coal due to its relatively low energy content and has long fueled some of Australia’s dirtiest power stations, some of which have already shut or are slated for closure.
The project is producing hydrogen by reacting coal with oxygen and steam under high heat and pressure in a process that also yields carbon dioxide and other gases.
If the project goes commercial, the plan would be to bury the carbon dioxide off the coast of Victoria, KHI has previously said. The Australian and Victoria state governments are running a parallel project to test transporting and injecting carbon dioxide under the seabed.
The hydrogen produced in the pilot project will be transported to a port site where it will be liquefied for export.
The next big step will be to ship a cargo on the world’s first liquefied hydrogen carrier, built by KHI. The voyage has been delayed to mid-year, due to COVID-19 restrictions which have slowed final checks on the tanker.
“The eyes of the world will be on Victoria when shipments of liquefied hydrogen commence in mid-2021,” Hirofumi Kawazoe, from KHI’s Hydrogen Engineering Australia unit, said in a statement.
Partners in the Australian side of the project include Japan’s Electric Power Development Co (J-Power), Iwatani Corp, Marubeni Corp, Sumitomo Corp and Australia’s AGL Energy Ltd , whose mine is supplying the brown coal. ($1 = 1.2922 Australian dollars) (Reporting by Sonali Paul; editing by Richard Pullin)