Australia, Japan Spearhead Future of Hydrogen Trading

By Daniel Khmelev
Daniel Khmelev
Daniel Khmelev
Daniel Khmelev is an Australian reporter based in Perth covering energy, tech, and politics.
January 6, 2022Updated: January 6, 2022

Australia is solidifying its ambitions to become the world’s hydrogen powerhouse, establishing a new trade pact with Japan in a bid to ramp up Australia’s hydrogen production and export capabilities.

The government views hydrogen as a potential boon for the nation’s economy, with estimates outlining the industry could generate more than $50 billion (US$35.8 billion) in GDP and 16,000 direct jobs by 2050.

The new $150 million Australian Clean Hydrogen Trade Program (ACHTP) will fund Australian-based hydrogen supply chain projects, as long as those projects are also able to secure overseas investment.

Japan will become the first target of the first round of exports, part of the “Japan-Australia Partnership on Decarbonisation through Technology”—an existing joint treaty focusing on the development of low-emissions tech.

Japan has been a focal point in Australia’s recent bilateral engagement, with the two nations signing a historic defence pact amid growing concerns of Chinese provocation in the Indo-Pacific.

Prime Minister Scott Morrison said he believed the move was vital in progressing a long term plan to reduce carbon dioxide emissions.

Epoch Times Photo
Australian Prime Minister Scott Morrison talks to media in Canberra, Australia, on Jan. 5, 2021, in a still from a video. (Australian Broadcasting Corporation/Reuters via The Epoch Times)

“It is critical that we work closely with our international partners such as Japan to deliver on Australia’s low emissions objectives,” Morrison said.

“Clean hydrogen is central to both Australia’s and Japan’s plans to achieve net-zero emissions while growing our economies and jobs.”

Australia’s 2021 Technology Investment Roadmap has targeted hydrogen, and five other priority areas, which it believes will be necessary to reach its net zero emissions target by 2050, including energy storage, low emissions steel and aluminium, carbon capture and storage, soil carbon, and ultra-low-cost solar.

Japan has been an eager consumer of Australian hydrogen, building the world’s first liquefied hydrogen carrier, the Suiso Frontier, to transport hydrogen in liquid form by cooling the gas to below minus 253 degrees Celsius (minus 423 degrees Fahrenheit).

Current hydrogen ambitions include Australian oil and gas giant Woodside’s recent plans to power Japanese cities using Australian hydrogen, along with projects in Queensland and Victoria exporting hydrogen to Japan.

The industry has also seen private investment spearheaded by mining magnate Andrew Forrest, who has paired up with the Queensland government to create a hydrogen mega-manufacturing centre on the state’s central coast.

Questions Around “Clean” Hydrogen

However, Forrest, along with some environmental groups, have raised concerns that Australia’s plan for “clean hydrogen” production involves the use of fossil fuels, thereby negating the positive effects of hydrogen as a carbon dioxide-free fuel.

Specifically, the government plans to create some of its “clean hydrogen” through brown coal “gasification,” a process that reacts coal with oxygen under high pressures and temperatures to hydrogen gas and carbon dioxide.

To avoid the production of carbon dioxide, the government plans on utilising carbon capture and storage (CCS), which involves capturing the emissions and piping them into large underground reservoirs.

But climate change communications organisations the Climate Council has previously challenged CCS, claiming that the emerging technology was “unproven and expensive.”

“Despite billions of dollars being spent here and overseas, no successful CCS projects exist,” the council stated.

The Climate Council instead supports “green hydrogen” made by way of electrolysis, a process that involves passing an electrical current (generated by renewable energy) through water.

Epoch Times Photo
Close-up photo of oxygen and hydrogen electrolysis (iStock)

However, while future plans for green hydrogen have been announced, currently operating hydrogen export projects all utilise coal gasification because hydrogen made through electrolysis has yet to reach cost competitiveness.

Specifically, the government has outlined it must reduce the cost of hydrogen made through electrolysis to under $2 per kilogram, a goal it plans to reach by 2030 after developing ultra-low-cost solar.