Japanese Consortium Threatens to Withdraw $2.35 Billion Investment in Hydrogen Project in Latrobe Valley
Key Ideas
- A Japanese consortium is considering pulling out a significant investment of $2.35 billion from the world-first coal to hydrogen project in the Latrobe Valley.
- The Hydrogen Energy Supply Chain (HESC) project, aimed at converting brown coal to hydrogen gas for export to Japan, completed its pilot phase successfully in 2022.
- Local political leaders emphasize the importance of the project for job creation, economic growth, and transitioning to a hydrogen economy, highlighting the need for government support and faster approvals.
- Challenges such as procurement issues, delays, and ideological differences pose threats to the commercial viability of the project, raising concerns about potential job losses and missed industrial opportunities.
A Japanese consortium, led by Kawasaki Heavy Industries, has issued a warning about potentially withdrawing a substantial investment of $2.35 billion from the Hydrogen Energy Supply Chain (HESC) project in the Latrobe Valley. The project, which focuses on converting brown coal into hydrogen gas for export to Japan after liquefaction, completed its pilot phase successfully in 2022. While the project is expected to bring economic benefits and job opportunities to the region, challenges such as difficulties in procuring hydrogen in Australia, delays, and ideological differences have put its commercial viability at risk.
Political figures like Minister for Economic Development Tim Pallas and Leader of The Nationals Danny O’Brien have emphasized the importance of the project in creating jobs, boosting exports, and transitioning to a hydrogen economy. They stress the significance of incorporating carbon capture and storage technologies into the project to mitigate carbon emissions and promote environmental sustainability. There is a call for government support, particularly from the Allan Labor government and Minister for Energy Lily D’Ambrosio, to facilitate investment in the project and ensure its successful realization.
Local representatives like Member for Morwell Martin Cameron underscore the urgent need for investment in new industries in the Latrobe Valley to secure its economic future post the closure of coal-fired power stations. The potential loss of the Japanese investment is seen as a setback that could hinder the region's industrial growth and job creation prospects. The situation highlights the delicate balance between economic development, environmental concerns, and political decision-making in driving forward projects like the HESC in regions like Gippsland.