MELBOURNE: A Japanese-Australian company has started producing hydrogen from lignite in an A $ 500 million ($ 387 million) test project to show that liquefied hydrogen can be safely produced and exported to Japan , announced the project sponsors on Friday.
The Japanese Kawasaki Heavy Industries is carrying out the pilot project with government financial support from Japan and Australia in the state of Victoria, which is home to a quarter of the world's known lignite deposits.
The project is key to helping Japan meet its net zero carbon target by 2050. The world's fifth largest energy consumer wants to increase its annual hydrogen requirement tenfold to 20 million tons by 2050, which corresponds to around 40% of its current electricity generation.
At the same time, Australia is pushing to become a major hydrogen exporter and will eventually compete with its dominance in global liquefied natural gas (LNG) trade, which could potentially give it a greener market for coal and gas.
Considered the lowest rank of coal due to its relatively low energy content, lignite has long fueled some of Australia's dirtiest power plants, some of which have already closed or are slated to close.
The project generates hydrogen by converting coal with oxygen and steam under high heat and pressure in a process that also produces carbon dioxide and other gases.
If the project goes commercially, there are plans to bury the carbon dioxide off the coast of Victoria, KHI previously said. The Australian Government and the State of Victoria are running a parallel project to test the transport and injection of carbon dioxide under the seabed.
The hydrogen generated in the pilot project will be transported to a port location, where it will be liquefied for export.
The next big step will be to ship a cargo on the world's first liquid hydrogen carrier built by KHI. The trip has been postponed to mid-year due to COVID-19 restrictions that have slowed final checks on the tanker.
“The world's eyes will be on Victoria when liquefied hydrogen shipments begin in mid-2021,” Hirofumi Kawazoe of KHI's Hydrogen Engineering Australia division said in a statement.
The partners on the Australian side of the project include the Japanese Electric Power Development Co. (J-Power), Iwatani Corp., Marubeni Corp., Sumitomo Corp. and the Australian AGL Energy Ltd., whose mine supplies the lignite.