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History will be made next week when Australia ships the world’s first cargo of liquid hydrogen, an event that will mark a milestone in a looming transformation of exports with one of the country’s most important partners amid the energy transition.The first ever liquefied hydrogen tanker, the Suiso Frontier, docked at the port of Hastings on Thursday and is due to depart again within a week with its shipment of hydrogen, derived from a $500 million Japanese-backed pilot project tapping the vast but carbon-intensive brown coal fields of the Latrobe Valley.The Suiso Frontier will take more than two weeks to reach Japan with its world-first cargo of liquid hydrogen. The project, which requires the extracted carbon to be used or buried, signals the potential emergence of a new low-carbon trade with Japan, which has been Australia’s largest buyer of emissions-heavy coal and LNG over the last several decades but which in October 2020 set a 2050 target to reach net zero emissions.Prime Minister Scott Morrison said the project is “key to both Australia and Japan and our hydrogen industries” and demonstrates the commitment of the two nations to cooperate in decarbonisation. Mr Morrison announced $7.5 million of funding to support the $184 million next stage of the project to take it through to commercial operations.“This project can be a kind of front-runner to achieve clean, new energy for Japan,” said Yuko Fukuma, spokeswoman at Kawasaki Heavy Industries for the tanker that the Japanese firm developed and built over the last five years.RELATED QUOTESAGLAGL Energy$7.300 -2.01%1 year1 dayJan 21Apr 21Jul 21Jan 224.0008.00012.000Updated: Jan 21, 2022 – 12.38pm. Data is 20 mins delayed.View AGL related articles Advertisement“The Japan-Australia partnership is a very long-term and trusted trade and investment, investment partnership ... we believe this can kick off the supply of large amounts of hydrogen to Japan, and this can really contribute to the energy mix issues in Japan.”‘An enormous Thermos flask’The Hydrogen Energy Supply Chain project, also backed by the federal and Victorian governments with $50 million of funding apiece, involves using lignite from the Latrobe Valley alongside biomass to create hydrogen using gasification technology.The hydrogen gas is refined and trucked to the port of Hastings, where it is super-cooled to minus 253 degrees Celsius to turn it into liquid, much colder than even the minus 161 degrees needed for LNG. That reduces it in volume to one-eight-hundredth of its gaseous form to make ship transportation feasible, but still a “step-change” in technology is required even from LNG transportation, said HESC spokesman Jeremy Stone.The liquefied hydrogen will be loaded into what former Chief Scientist Alan Finkel describes as “an enormous thermos flask” on the ship for the two-week journey to Kobe, in what will be the first time in the world that liquid hydrogen has been made and transported by sea to an international market.Japan has a target to lift hydrogen use to 3 million tonnes a year by 2030, and to 20 million tonnes by 2050, with the clean fuel to be used in power generation, building heating and cooling and industrial processes. The pilot stage of the HESC project aims to produce 225,000 tonnes a year.Dr Finkel, now the federal government’s special adviser on low-emissions technology, describes the technology used on the 116-metre-long Suiso Frontier to keep the liquid hydrogen secure and stable at sea as an “engineering marvel” that opens up a new horizon in internationally traded clean energy.The shipping part of the HESC project is applicable for the export of liquid hydrogen however it is made, he underlined. Safety conditions and requirements have been set out by the International Maritime Organisation and the ship has also been certified by relevant Japanese authorities, Ms Fukuma said.“It’s as effective a vacuum as you would find in deep space,” Dr Finkel said of the vacuum between the inner and outer flasks that acts as an extremely effective insulator to keep the liquid hydrogen cold.“It’s so effective that there’s hardly any heat transfer from the outside to the inside, and therefore very little hydrogen boils off during the journey, so it’s an incredible feat.”Carbon storageCarbon extracted during the production process needs to be either reused, or buried underground, which is intended in part of a separate but closely linked venture, the 10-year-old CarbonNet project, which is targeting a carbon transportation and storage system in a depleted gas field in the Bass Strait.Mr Morrison also committed $20 million for the next stage of that project, contingent on additional commitments from the Victorian and Japanese governments and the HESC partners, which include major Japanese electric utility J-Power, Iwatani Corporation, Marubeni, Sumitomo and AGL as well as Kawasaki Heavy Industries.Until the CarbonNet operation starts up, the HESC project is relying on Australian carbon offset units to nullify its emissions impact, with 2905 units each representing one tonne of CO2 emissions having been bought to cover the initial cargo.Critics of the costly HESC pilot project argue that it relies on yet-to-be-proven carbon capture and storage (CCS) technology and fear that the coal-based process will only entrench the use of fossil fuels in the production of hydrogen, which can be produced more cleanly from water using renewables-powered electrolysis. It will also only produce up to three tonnes of hydrogen over a year, from up to 160 tonnes of brown coal, with no decision likely for at least two years as to whether it will be scaled up to a commercial project.Local opponents in the Mornington Peninsula, many of whom also opposed AGL’s now-abandoned Crib Point LNG import project in Westernport Bay, are worried about the impact of dredging in the bay, the introduction of marine pests, and the general industrialisation of the region as well as the climate impact.Vocal advocates of renewable-based hydrogen, notably iron ore billionaire Andrew Forrest, have also slammed fossil fuel-based hydrogen ventures as useless to help reach net zero emissions and relying on “failed” CCS technology.But Mr Stone, who is a non-executive director at J-Power, said the driver of the project as a carbon-reducing venture stacks up and that “blue” hydrogen involving CCS will be an important element of the energy transition.He said early results from the trial support findings that the costs of “blue” hydrogen will be about a third of those of “green” hydrogen.Also, he said, the early availability of the gas was important for Australia to build markets and trading relations amid fierce international competition from other aspiring hydrogen exporters such as the Middle East, Brunei and Europe, and to have a hope of replacing fossil fuel exports.“We know that over time, fossil fuel exports purely as fossil fuel will decrease, whether it be coking coal, thermal coal, natural gas, we know it’s going to happen,” Mr Stone said.“If we don’t move fast enough, we’re going to miss the boat, so what we need to do is produce the cleaner hydrogen and carbon-neutral hydrogen as soon as we can, otherwise Japan and South Korea will start having supply contracts with other countries.”Accreditation is criticalThe project, formally launched in 2018, also offers hope for employment at the Latrobe Valley brown coalfields as the local coal power stations that use the fuel face a likely early demise amid the rampant rise of cheap renewable energy.“If we could utilise a large quantity of coal to produce hydrogen, this should be certainly a kind of a new coal export industry for your country,” Ms Fukuma said.Dr Finkel says the focus should be on the emissions associated with the production of energy, rather than the underlying technology. He says the project is important also to diversify new clean energy sources amid uncertainty as to how the cost competitiveness of green versus blue hydrogen will pan out.Using 100 per cent renewable energy for the hydrogen exports required to replace the energy value of Australia’s existing fossil fuel exports would require massive amounts of land for solar and wind farms, involving lengthy land right issues, and huge investment in new transmission lines and other resources, Dr Finkel said.However, he said it was critical that all hydrogen was accredited through an internationally recognised guarantee scheme – which is currently being developed – so buyers would know what they were getting.“As long as buyers know what they’re getting then we really should value the diversification of supply and the cost competition that will ultimately lead to the lowest-cost clean energy supply of the future,” Dr Finkel said.He said the development of a ship to transport liquid hydrogen opened up a new horizon for trading in clean energy.“The Kawasaki Heavy Industries ship is the forerunner of a global marketplace in renewable energy,” Dr Finkel said.“It’s an incredible feat ... it’s the first of its kind, and it enables the shipping of renewable energy from one continent to another.“Yes, you can send it by undersea cables such as is being proposed by Sun Cable [the solar export project from the Northern Territory to Singapore] but if you want to have an international marketplace, like we have with LNG where you can have contracts and spot markets, and you can go to every single country that has a port in the world, you need to be sending it by ship.”

Angela Macdonald-Smith writes on the resources industry with a focus on energy, including gas, oil, electricity and renewables.