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Two large Japanese corporations have withdrawn their support for Australian hydrogen projects within days of each other – amid continued investment into fuel-cell cars by Toyota.
A multibillion-dollar deal to supply Japan with hydrogen appears to be in tatters.
First reported by The Age, a trial to supply Kawasaki Heavy Industries with 'brown hydrogen' – created from coal using converted powerplants – has been abandoned, according to Japanese news outlet Nikkei.
The plan involved converting brown coal to liquefied hydrogen in Victoria's Gippsland region, to be transported via specially-built ships out of Hastings – providing Japan's industry with a steady supply of clean-burning hydrogen.
Japanese car giant Toyota has been one of a handful of manufacturers pushing for hydrogen to be adopted as an alternative fuel – either replacing petrol with internal-combustion engines, or used in conjunction with fuel-cells to convert hydrogen to electricity.
However, it now appears Japan's Kawasaki Heavy Industries has walked away from the deal with Victoria, with local media claiming it had become "difficult to produce hydrogen in Australia within the deadline".
The Victoria Government provided $50 million of start-up capital to the program – in an effort to support jobs in the La Trobe Valley, home to coal-fired powerplants – while the Japanese Government pledged an investment of $2.35 billion.
It's just the latest Australian hydrogen project to be abandoned by Japanese partners in a matter of days.
Nikkei Asia reports Japanese utility company Kansai Electric Power has also withdrawn from a project to produce green hydrogen.
Unlike brown hydrogen, derived from brown coal, green hydrogen is created from water – with the process to be powered by a combination of wind and solar power.
Named the Central Queensland Hydrogen Project (CQ-H2), the facility is set to be based in Gladstone, with significant support from state and federal governments, as well as large investments from overseas partners.
Kansai was part of a consortium with other Japanese firms including Iwatani and Marubeni, an infrastructure company from Singapore called Keppel, and the Queensland State-owned utility corporation Stanwell.
According to the report, Kansai cited higher costs of hydrogen production identified during engineering project planning, which had increased since the original feasibility study conducted in 2021.
It's assumed the project will continue without the support of Kansai, given it has already received a commitment of $117 million from government and consortium partners, and is eligible for more than $2 billion in federal grants.
Ben Zachariah is an experienced writer and motoring journalist from Melbourne, having worked in the automotive industry for more than two decades. Ben began writing professionally more than 15 years ago and was previously an interstate truck driver. He completed his MBA in Finance in early 2021 and is considered an expert on classic car investment.
