Japanese gov't awards $1.62 bln to Japan-Australia hydrogen energy supply JV (updated)

Kawasaki Heavy Industries

07/03/2023 02:12

(Adds details)
       March 7 (Reuters) - A Japanese-Australian venture
producing hydrogen from brown coal said on Tuesday it had
entered its commercial demonstration phase, with a commitment of
220 billion yen ($1.62 billion) in funding from the Japanese
government.
    Led by Kawasaki Heavy Industries (KHI)  7012.T , Hydrogen
Energy Supply Chain (HESC) project is a A$500 million ($336.40
million) coal-to-hydrogen project backed by Japan and Australia
as a way to switch to cleaner energy and cut carbon emissions.
    The move, initially flagged at the Asia Zero Emission
Community's (AZEC) first ministerial meeting on Saturday, comes
as part of Japan's push to accelerate its efforts to decarbonise
Asia's economies and combat climate change.
    Japanese companies, including KHI and Iwatani Corp  8088.T ,
have agreed to jointly create Japan's first hydrogen supply
chain between Australia's Victoria state and Kawasaki, an
industrialised city near Tokyo, to advance energy transition
toward a cleaner society, Industry Minister Yasutoshi Nishimura 
said on Saturday.
    Under the HESC project, Electric Power Development (J-Power)
 9513.T  and Sumitomo Corp  8053.T  will produce hydrogen
through coal gasification using carbon capture and storage (CCS)
in Gippsland, Victoria.
    KHI and Iwatani will oversee the liquefaction, loading,
transportation and unloading of hydrogen to Japan.
    The 220 billion yen fund will come from the Japanese
government's Green Innovation Fund.
    J-Power and Sumitomo plan to initially produce between
30,000 to 40,000 tonnes per annum of gaseous clean hydrogen,
with a future potential production of 225,000 tonnes per annum.
    Subject to commercial agreements and meeting the required
environmental permits and approvals, they aim to start
production in late 2020's. 
    KHI and other Japan-based firms said last March that a pilot
project to transport hydrogen produced from brown coal in
Australia to Japan in the world's first liquefied hydrogen
tanker had proven technically feasible.
    Energy-poor Japan also hopes to become the world's leading
hydrogen economy to reduce dependence on traditional polluting
fossil fuels such as coal and oil. 
($1 = 136.0500 yen)
($1 = 1.4863 Australian dollars)

 (Reporting by Riya Sharma in Bengaluru and Yuka Obayashi in
Tokyo; Editing by Rashmi Aich)
 ((Riya.Sharma@thomsonreuters.com;))