PLANS to export hydrogen from Western Port to Japan are in doubt, after the lead company in the venture, Kawasaki Heavy Industries, issued conflicting reports about its viability and their intention to proceed.
The project was seen as an essential part of the hydrogen energy supply chain (HESC) that would see the manufacturing of hydrogen from brown coal in the Latrobe Valley, before being liquefied at Hastings and shipped to Japan to provide what proponents call “green energy” in that country.
The brown coal-to-hydrogen project’s commercial partners, led by Kawasaki, have been backed by the federal and state governments, who each provided $50m towards the pilot project, with another $2.35b reportedly offered by the Japanese government towards the commercial project, should it proceed.
The project has been controversial from the start, with former Victorian Planning Minister Richard Wynne effectively bypassing Mornington Peninsula Shire’s planning authority by fast-tracking approval in 2019.
The Mornington Peninsula Shire mayor at the time, Cr Bryan Payne, said news of the government’s takeover of planning powers for the hydrogen project “sadly reflects on the state of planning in Victoria and raises issues of where public health and safety responsibility fits with government at both the federal and state level” (Hydrogen plant to get all clear, The News 6/11/18).
Environmentally, opponents argue the HESC project is just another inappropriate development in ecologically delicate Western Port, with an estimated 3.8 megatonnes of carbon dioxide and other noxious gases produced each year from the production process. The HESC project partners have said they will use carbon capture and storage technology to pump those gasses deep underground in the Gippsland Basin; a process opponents say has never succeeded anywhere globally despite billions being spent in developing the technology.
It’s argued that while the project would enable Japan to cut it’s CO2 emissions, it would lift Victoria’s emissions, raising doubts whether the state will meet its emissions target reductions of 75-80 per cent by 2035; net zero by 2045 (MPs under pressure over hydrogen, The News 14/11/23).
But delays and setbacks in the project have seen it falter. Pressure in Australia against the project has remained high, and the safety of the project was questioned after a fire aboard the purpose-built hydrogen tanker, Suiso Frontier, while moored in Western Port in 2022 (Fire aboard hydrogen ship, The News 5/4/22).
Japanese media reported in mid-November that Kawasaki had “significantly revised its plans” to “establish an international supply chain to procure hydrogen from Australia” as it had become difficult to procure hydrogen in Australia within the deadline. The report by Japanese news outlet Nikkei stated “the company has changed hydrogen procurement to domestic” and it was “downsizing its hydrogen carriers and is steering towards a more ‘realistic solution’”.
The apparent policy change by the global energy giant was a cause for celebration by environmental groups that had lobbied against the project for years. The secretary of Save Westernport, Julia Stockigt, told The News “Save Westernport and community groups around Western Port Bay have opposed the HESC project since 2018”. “Western Port’s internationally recognised Ramsar Wetlands are forever being imperilled by ludicrous industrial projects with significant environmental impacts – and HESC has been the biggest threat of all.
“We were delighted to read a report in the Japanese press that said one of the key project partners has decided to pull out of HESC. “The scale of the commercial HESC proposal was enormous; Western Port was to be used as the world’s guinea pig, with huge liquefaction, storage and shipping facilities for the commercial stage, far bigger than anything attempted anywhere in the world, to produce what the project proponents claimed was ‘renewable hydrogen’ to decarbonise Japan’s energy future.”
But celebrations could be short-lived with Kawasaki announcing what appeared to be conflicting information in December, less than a month later, stating they were “committed to developing a commercial scale project to produce clean hydrogen from brown coal and transport it to Japan”. “However, due to time and cost pressures, the commercial demonstration phase of the project will now occur in Japan [instead of Australia].”
The release stated that representatives of Kawasaki had recently met with both state and federal government stakeholders in relation to the project. A Kawasaki spokesperson, Yasushi Yoshino, said “The change to phase 1 of the project does not impact Kawasaki’s commitment to the commercial scale project.”
The conflicting information has left environmental groups and Australian taxpayers, who have stumped up over $100m towards the project, in the dark. Save Westernport and many other environment groups, including Environment Victoria and Friends of the Earth believe both the federal and Victorian Labor governments have an onus of responsibility to come clean on the status of HESC.
“Western Port belongs to the people of Victoria. It is a world recognised wetland — not an environment to be forever jeopardized by projects like HESC,” said Stockigt. “We have sought clarification from our elected representatives on numerous occasions, including from Hastings MP, Paul Mercurio, but as yet we’ve received no clear answer. Decisions about HESC have always been made under a cloud of secrecy, and it seems nothing has changed. “We’ll be meeting with Mercurio again in early 2025, and we hope to get the response our community deserves.”
“Save Westernport’s position is that any ongoing support or funding for HESC by Labor governments completely undermines their credibility on climate change, emissions and the transfer to renewables, which, in the case of hydrogen must be authentically ‘green’— that is, not reliant on fossil fuels or on (unproven) carbon capture and storage efforts to manage the extensive emissions from gasifying coal.”
Multiple sources have told The News it appears likely the project would not proceed, discounting the most recent announcement as “a face-saving exercise”.
First published in the Mornington News – 7 January 2025
