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Australia-Japan consortium explores hydrogen supply chain

Out-Law News | 30 Sep 2021 | 11:22 am | 1 min. read

An expanded Australia-Japan consortium will start a feasibility study on an A$10.4 million (US$7.6m) green hydrogen project.

The project will use renewable energy to produce hydrogen, liquefy it at the Gladstone port in Queensland, and then export the liquefied hydrogen to Japan.

Four new companies have joined the consortium, which is led by Queensland’s state-owned energy company Stanwell and Iwatani Corporation, Japan’s largest hydrogen supplier.

The new joiners are three Japanese companies Kawasaki Heavy Industries, Kansai Electric Power Co and Marubeni Corp, and Australian energy infrastructure company APA Group., according to a statement by Stanwell.

The Australian Renewable Energy Agency (ARENA) announced that it would provide A$2.17m to the study. The Japanese Ministry of Economy, Trade and Industry also funds the study.

Karah Howard of Pinsent Masons, the law firm behind Out-Law, said: “Once more an exciting partnership between Japanese and Australian companies in the green hydrogen space, each supported by their respective government’s investment into the feasibility study for the Gladstone, Queensland, project supply of green hydrogen to Japan, marking these two jurisdictions once more as front-runners in the liquified hydrogen market.”

In June, Stanwell secured land for the project at Aldoga near Gladstone. If feasible, the project would initially aim to produce 36,500 tonnes hydrogen each year for export to Japan from 2026. Stanwell then will scale up the production to 328,500 tonnes each year in 2031 to meet forecast Japanese demand.

The project could generate A$4.2 billion in hydrogen exports and AU$10 billion for the Queensland economy. It would create over 5000 jobs in Queensland.

Recently, the Queensland government announced that Japan’s largest oil company ENEOS will carry out a study on building up a commercial scale green hydrogen supply chain between Japan and Queensland.

In May, Australian energy company Fortescue Future Industries (FFI) signed a deal with Japan’s IHI Corporation and its Australian arm IHI Engineering Australia to study the potential of establishing green ammonia supply chains between Australia and Japan.

Australia and Japan signed a joint statement and agreed to cooperate on the deployment of hydrogen in January 2020.