Over the past several decades, global warming has emerged as one of the largest challenges facing humanity. In 2015, the Paris Agreement on climate change brought together many countries to strengthen the global response to the threat, vowing to keep the average global temperature rise this century below 1.5 degrees Celsius above pre-industrial levels.
This brought hydrogen energy - which does not emit greenhouse gas - to global attention. Both Japan and Australia have recognised the opportunity. Japan’s Ministry of Economy, Trade and Industry released a Strategic Road Map for Hydrogen and Fuel Cells in March 2019 and the Australian government published its National Hydrogen Strategy in November 2019.
Meanwhile, a joint Statement of Cooperation on Hydrogen and Fuel Cells was signed and released on 10 January 2020 at the Australia-Japan Ministerial Economic Dialogue in Melbourne, emphasising hydrogen as a key contributor to emissions reductions “especially when produced from renewable energy or fossil fuels combined with Carbon Capture Utilisation and Storage (CCUS)”. The statement acknowledged “the steady progress of the HESC Project towards establishing an international hydrogen supply chain”.
The hydrogen business has been in constant focus not only in Japan and Australia but all over the world. Demands for hydrogen energy have been increasing recently, especially in China and Korea as well as Japan, with implications for Australia, one country with the potential to provide a huge amount of hydrogen.
Australia, however, is not unique. Norway can produce and export hydrogen using renewable hydroelectric power and wind power thanks to its natural geography of fjords. Natural gas is also abundant in Norway which helps its hydrogen business.
Elsewhere, Canada, Russia and some countries in the Middle East region are able to produce hydrogen from natural gas and/or renewable energies. These countries might be Australian rivals when it comes to supplying hydrogen.
Australia is the world’s biggest exporter of LNG, a gas having similar characteristics to hydrogen in terms of clean energy and extremely low liquid temperature. Australia’s long experience in the LNG business gives it a competitive advantage in the emerging hydrogen energy supply chain. Hydrogen resources such as renewable energy and fossil fuels abundant in Australia also contribute to its greater competitiveness in terms of hydrogen supply.
Furthermore, Australia is close huge Asian markets for hydrogen and enjoys good relationships with most countries. From the buyer perspective, Australia is one of the most stable countries in terms of economics, public security and politics. These factors together mean Australia has a high potential to be a leading country in the field of hydrogen business, in both supply and demand.
The scale of the global hydrogen energy business is expected to grow dramatically through the 2020s and beyond. By 2050, it is expected hydrogen energy could supply 18 per cent of the electricity required in the world while contributing up to 6 Gt in annual CO2 abatement – despite the world’s population increasing by 2 billion. As such, hydrogen plays an important role as one of the cleanest energies in countering global warming. The industry forecasts to deliver significant economic growth, generating $US2.5 trillion sales per year and create 30 million employment opportunities.
Given this global environment, in 2007 KHI established the Kawasaki Group mission statement as “a global technology leader with diverse integrated strengths. We create new value for a better environment and a brighter future for generations to come”.
From 2009, KHI has recognised hydrogen as a clean energy, contributing to a healthier future global environment. KHI backed the building of a hydrogen energy supply chain using its history and expertise of the technology in the fields of extremely low temperatures, LNG ships, plant engineering and gas turbines.
In particular, KHI is focused on progressing the Hydrogen Energy Supply Chain (HESC) pilot project in Japan and Australia with several project partners as a high priority. This HESC pilot project is recognised in the Australian National Hydrogen Strategy and is already attracting global attention.
In the HESC pilot project, hydrogen gas is produced from the extensive brown coal resources in Victoria’s Latrobe Valley. The gas is cooled to -253 degrees celsius for liquefaction at the Port of Hastings, the process reducing its volume to 1/800th its initial state. That liquid is loaded onto the liquefied hydrogen ship to be carried to Kobe in Japan.