A Japanese-Australian consortium has commenced the production of hydrogen from brown coal in a $388m (A$500m) pilot project in Australia.

The Hydrogen Energy Supply Chain (HESC) Pilot Project is being developed by the consortium comprising Kawasaki Heavy Industries, J-POWER, Iwatani, Marubeni, AGL and Sumitomo. It is supported by the Victorian, Australian and Japanese governments.

The project aims to produce and transport clean liquid hydrogen from Australia’s Latrobe Valley in Victoria to Kobe in Japan.

Located in the Latrobe Valley in Victoria, the newly constructed pilot gasification and gas refining facility is capable of processing 160t of Latrobe Valley brown coal and delivering up to three tonnes of hydrogen gas annually.

Kawasaki’s subsidiary Hydrogen Engineering Australia engineering manager Hirofumi Kawazoe said: “The next major HESC Pilot development will be the first shipment of hydrogen between Australia and Japan, aboard the world’s first purpose-built liquefied hydrogen carrier, the Suiso Frontier.”

The consortium plans to start shipments of liquefied hydrogen this year via a specialised marine carrier.

J-POWER Latrobe Valley non-executive director Jeremy Stone said that the HESC Pilot has led to the creation of around 400 jobs across the supply chain in Victoria.

Stone added: “A commercial-scale HESC can leverage and build local skills, potentially creating thousands of jobs.”

A commercial-scale HESC project is expected to produce 225,000t of clean liquid hydrogen annually with carbon capture and storage.

Separately, the Victorian and Commonwealth governments is advancing the CarbonNet Project for the hydrogen pilot’s commercialisation.

The CarbonNet Project aims to establish a commercial scale Carbon Capture and Storage (CCS) network in Gippsland, Victoria.

Stone noted: “We estimate our project could reduce CO? emissions by 1.8 million tonnes per year, equivalent to the emissions of some 350,000 petrol cars.”