Frequently Asked Questions (FAQs)

Here are some answers to common questions we’ve been asked about the HESC Project.

General FAQs

Latrobe Valley FAQs

Hastings FAQs

To speak to a member of our project team, please phone 1800 875 251.

 General FAQs

What is the HESC Project?
The Hydrogen Energy Supply Chain (HESC) is a world-first pilot project to produce and transport clean hydrogen from Victoria’s Latrobe Valley to Japan.

The Australian, Victorian and Japanese Governments are jointly working with reputable and highly experienced industry partners on this initiative.

The HESC Project will begin with a pilot phase, aiming to demonstrate a hydrogen supply chain that includes production, transportation and storage, with the ultimate goal of a commercial-scale phase in the 2030s.

Key elements of the pilot supply chain include:

  • A newly constructed hydrogen production plant, located at AGL’s Loy Yang Complex in the Latrobe Valley, will produce hydrogen gas using existing technologies adapted specifically for Victorian brown coal
  • The hydrogen gas will be transported by road to a liquefaction and loading terminal at Bluescope’s existing site at the Port of Hastings
  • The hydrogen gas will be liquefied at the Port of Hastings then shipped to Kobe, in Japan, by a marine carrier specifically developed for the task.
What’s the project timeline?
The HESC Project is being developed in two phases, beginning with a pilot phase.

Construction for the pilot phase will begin in 2019, following planning approvals. The pilot phase is expected to operate for roughly one year from 2020 to 2021.

If the pilot is successful, the Project Partners will move towards commercial scale operations and a multi-billion dollar commercial phase. The decision to proceed to a commercial phase will be made in the 2020s with operations targeted in the 2030s, depending on the successful completion of the pilot phase, regulatory approvals, social licence to operate and hydrogen demand.

What are the main uses for hydrogen energy?
Hydrogen has the potential to revolutionise the energy and mobility sectors given its wide range of potential uses and the advantages it has over other energy carriers.

Uses of hydrogen energy include:

  • Mobility: including hydrogen-powered cars, buses, trains, trucks, ships, and industrial vehicles such as forklifts
  • Stationary fuel cells: Stationary fuel cells operate like large-scale portable batteries and can be used to power or heat homes. They can be replaced or topped up as required
  • Power generation: Hydrogen is anticipated to be used for power generation on a large scale. In Japan, hydrogen power generation is expected to enable lower dependency on nuclear and a potential replacement of oil-fired power generation.
Is hydrogen safe?
Yes. Pure hydrogen gas is not toxic and cannot ignite or explode spontaneously. An ignition source and oxidizer (like oxygen) must be present. When handled responsibly and safely, hydrogen is no more or less dangerous than other flammable fuels like natural gas and gasoline. Technologies and handling practices already exist to ensure that hydrogen can be safely produced, stored, transported and used.

Measures will be put in place along all stages of the supply chain to prevent, detect and mitigate the risk of hydrogen leaks. These will be in accordance with government standards for portable gases and fuels.

Additional measures will be used to safely store liquid hydrogen, which must be kept at extremely low temperatures, including the development of purpose-built ships for overseas transport.

The liquid hydrogen storage containers are very solid, safe and, similarly to other specialised containers, are manufactured to comply with strict industry standards. They are double-walled and vacuum sealed. They are also designed to release the hydrogen as a gas in the unlikely event that the outer or the inner wall is breached.

The HESC Project Partners have a wealth of experience in the safe handling of hydrogen gained since the 1970s. They have developed world’s best practice health and safety procedures that will be followed carefully in all Australian operations. In Japan, they already operate many hydrogen facilities and refuelling stations.

How will the pilot phase work?
The pilot phase aims to demonstrate that a hydrogen supply chain from Australia to Japan is viable. The pilot will involve producing hydrogen from brown coal in the Latrobe Valley, converting it to liquid and transporting it to Japan by sea.

Hydrogen production will be undertaken at a pilot facility, proposed to be built at AGL’s Loy Yang Complex to enable easy access to brown coal.

The hydrogen gas will then be transported by road to a second pilot facility at Bluescope’s existing site at the Port of Hastings where it will be liquefied and loaded onto a purpose-built marine carrier before being transported to Japan by sea.

The pilot phase will run for about 12 months. After this time, the Project Partners will use the results of the trial to assess whether it will be possible to ‘scale up’ operations to transport larger quantities of liquefied hydrogen on a commercial scale.

What will happen once the pilot phase is complete?
Options for the pilot test facilities post-pilot phase are currently under consideration. The project consortium will use the results of the pilot phase to assess whether it will be commercially viable to ‘scale up’ operations to produce and export hydrogen on a commercial scale.
Will there be opportunities for local businesses?
Yes, the Project Partners will actively encourage the use of suitably qualified local labour and trades wherever possible. Increased economic activity stemming from the construction and operation of both the pilot and commercial phase will generate enormous benefits for the whole Australian economy.
Who is delivering the HESC Project?
The Australian portion is coordinated by a consortium of highly reputable Project Partners, including Kawasaki Heavy Industries (KHI), J-POWER, Iwatani Corporation, Marubeni Corporation and AGL.

The Japanese portion is coordinated by HySTRA (the Japanese Consortium).

Given the potential for this project to create a new industry in Victoria, the Victorian and Australian Governments, along with the Japanese Government and industry Project Partners, are investing in the pilot phase.

Why invest in hydrogen?
Hydrogen is the clean energy and commodity of the future. Countries all over the world face real challenges to address energy security while also reducing their emissions in a global push to tackle climate change, in line with international environmental commitments.

Hydrogen has been identified as the clean energy and commodity of the future to help address the need to diversify energy mix and reduce carbon emissions.  It is seen as a credible solution to the world’s energy and climate change problems. As a result, global demand for hydrogen will grow exponentially and the hydrogen market is expected to be worth US$2.5 trillion by 2050 due to its versatility in power generation, storage and zero emission fuel-cell vehicles.[1]

Japan is investing heavily to leverage hydrogen to diversify its energy mix and reduce CO2 emissions. The Japanese Government has established a detailed policy roadmap which seeks to dramatically increase the use of hydrogen by around 2030 and beyond.[2]

Given there are very few domestic sources of hydrogen in Japan, Japan is seeking to work with other countries, primarily Australia, to explore ways to produce and import the commodity. Australia could be the first country to create a thriving hydrogen export industry with huge local economic benefits.

Many other countries around the world are investing in developing a domestic hydrogen market, including South Korea, China, Germany, France, the United Kingdom and the United States.

[1] Hydrogen Council, Hydrogen Scaling Up, November 2017, pg 8

[2] Japanese Government, Hydrogen Basic Strategy, 26 December 2017, Annex I

How do you produce hydrogen?
Hydrogen can be produced using various resources such as: coal (incorporating Carbon Capture and Storage (CCS) technology); biomass; or natural gas from nuclear energy or renewable energy sources (i.e. wind, solar, tidal, geothermal, and hydroelectric power to split water). The two production methods widely considered to be the most promising are hydrogen from brown coal (with CCS), and hydrogen from renewables.[1]

Hydrogen production from coal is achieved through gasification. Coal gasification works by first reacting coal with oxygen and steam under high pressures and temperatures to form synthesis gas. Synthesis gas is a mixture consisting primarily of carbon monoxide (CO) and hydrogen (H2). The synthesis gas is cleaned of impurities, and the carbon monoxide in the gas mixture is reacted with steam to produce additional hydrogen and carbon dioxide. Hydrogen is removed by a separation system. The highly concentrated CO2 can be separated and captured using CCS technology.

Hydrogen from renewables can be produced in several ways, including production from electrolysis, biomass conversion, and solar conversion. Hydrogen production from electrolysis is achieved by splitting water into hydrogen and oxygen using electricity from renewable sources.

Hydrogen production from biomass conversion is accomplished via either thermochemical or biochemical conversion to other products that can then be separated or reformed to hydrogen, or fermentation techniques that produce hydrogen directly.

Hydrogen production from solar conversion uses either thermolysis (splitting water at very high temperatures), with solar-generated heat for high temperature chemical cycle hydrogen production, or photolysis in which solar photons are used in biological or electrochemical systems to produce hydrogen directly.

[1] IEA, Hydrogen technology Roadmap, 2015, page 42


What will the hydrogen from the pilot be used for?
The primary aim of the HESC pilot phase is to produce hydrogen in Australia for export and use in Japan.

Only a very small quantity (one to three tonnes) of hydrogen will be produced during the pilot phase. This will be used for demonstration purposes only.

What is the cost of the pilot phase?
The HESC project will be delivered in partnership with the Commonwealth and Victorian governments who have invested $100 million into the pilot project in Victoria with the remainder funded by the private sector project partners and Japanese government.

The Australian portion of the investment will be spent in Victoria where the Pilot Project is expected to create many jobs during its planning, construction and one year of operation.

Will the pilot plant produce CO2?
Yes, although only a very small quantity.

As the amount of hydrogen being produced for the pilot is very small (one to three tonnes) the amount of CO2 is expected to be 100 tonnes. This is equivalent to the annual output of approximately 20 cars.

Latrobe Valley FAQs

Where will the plant be located?
The plant will be located at the AGL Loy Yang Complex near Traralgon in the Latrobe Valley.
Have you proved the technology will work?
Yes. The plant will leverage existing coal gasification technology.  The pilot will develop and optimise the technology specifically for Victorian brown coal.
What is the lifespan of the plant?
The design life for most of the plant equipment is 10 years. However, the pilot operation is only planned to take place for one year. The licence sought for the pilot will cover operations for the period of 2020 to 2021.
How much hydrogen gas will the plant produce?
We expect the pilot plant to be able to produce up to 70 kg (0.07 tonnes) of hydrogen gas each operating day. Up to three tonnes of gaseous hydrogen will be produced over the one year pilot. The amount of hydrogen gas produced during the commercial phase will be determined during the review of the pilot.
How much electricity will the plant use?
The plant will use pumps, conveyors, compressors and other machinery that, combined, will draw up to 500kW (peak). In total, this is less than 1,560 MWh for the year of operation. This is equivalent to the annual energy use of around 110* homes.

* The Office of the Chief Economist Australian Energy Update 2016 states that the average Australian home uses 50 gigajoules of energy (13.8889 MWh) per year.

Will you be doing any road works?
No. No external roadworks will be required.
How much equipment will be contracted or purchased locally?
Our preference is to use local contractors where possible, including in the design and development stages.
Will there be construction jobs for local people?
Yes, the project will be looking to employ local people for both the construction and the operation of the pilot plant. We are already providing employment for a number of local professionals as we undertake planning of the construction and operation phases. The Project Partners will need extensive assistance from local sub-contractors.

The pilot will create immediate jobs for the Latrobe Valley and surrounding areas.

How will the hydrogen gas be stored and transported?
Hydrogen gas will be stored and transported in a high pressure tube trailer from commercial operators who comply with Australian safety standards and are already storing and transporting hydrogen gas in Australia.
How big will the plant be?
The overall site footprint of the pilot plant will be approximately half a hectare (5,000 square metres).
What are the expected traffic impacts?
Traffic impacts will be relatively small.  Trucks will operate during the daytime only, with one trip made each month.
Will there be any waste as a result of the coal-hydrogen gasification process?
There will be some by-products generated, including ash (from the coal), a small amount of water from the drying and cooling process, and some used refractory and metal material from the gasifier. Any waste materials will be contained on-site as part of the plant design, treated on-site or disposed of, via accredited disposal pathways (e.g. landfill).
When will you be starting work?
We expect construction to start in early 2019 and operations to start in 2020.
What are the working hours during the construction period?
Construction will take place during standard daytime hours.
Will there be people coming here to work from outside the Latrobe Valley?
Yes. A site manager and engineers will travel from Japan for the duration of the one-year pilot operation phase. All other personnel are expected to be sourced locally.
When will you be ready to hire local staff and contractors?
We hope to be ready to hire local staff and contractors from 2018.

Port of Hastings FAQs

Why was the BlueScope land at the Port of Hastings chosen as a location to process hydrogen?
The Port of Hastings is an existing, secure industrial port that is well-suited for the pilot phase. It already has appropriately zoned land and jetty facilities, is accessible using existing road transport routes, and is already used to ship gas, oil and other energy products.

While the proposed Hastings site for this project is on existing industrial land, it is nearby to a number of local communities and sites of environmental significance. Development of the Hastings component of the HESC pilot phase will be undertaken with careful consideration of both residential and environmental impacts.

The pilot plant hydrogen liquefaction and loading operations do not require any dredging, or any works on water. The existing berth at BlueScope is suitable to allow safe ship loading of liquid hydrogen. The liquefaction facility will be constructed on existing industrial land owned by BlueScope, leased to the Project.

Where will HESC be located in the Port of Hastings?
At the existing Bluescope site.
Will the project require dredging of Western Port?
No, dredging is not required.
Are there plans to process coal at Western Port?
No. The HESC consortium is not involved in any plans to process coal at Western Port.
How will HESC manage the impacts of ballast water?
We do not anticipate that any ballast water will be released.
However, if ballast water does need to be discharged at Hastings, a water treatment facility will be installed on the ship to ensure ballast water is treated prior to being released. This would prevent the spread of foreign marine species to the Port of Hastings.
Have you proved the liquefaction technology will work?
Yes. We will be designing and building the pilot liquefaction facility in collaboration with an experienced and well-regarded commercial supplier with a proven track-record.. The technology has been in use for more than 25 years in many countries. Both KHI and Iwatani Corporation, two of the HESC Project Partners, already operate larger liquefaction facilities in Japan.
Why are you liquefying the hydrogen here rather than in Japan?
Liquefying hydrogen reduces it to 1/800th of its volume. This makes it more efficient to transport over long distances. Liquefying hydrogen is a common transport and delivery method as hydrogen is a bulky gas.
How much liquefied hydrogen will the facility produce?
The facility will have 0.25 tonnes per day of liquefaction capacity. Exact quantities of hydrogen liquefaction will depend on the final quantities of hydrogen produced in the Latrobe Valley.
How many trips will the marine carrier make between Australia and Japan?
We expect the marine carrier to make one trip between Australia and Japan every three months over the one-year pilot.
How will the marine carrier store the liquefied hydrogen?
The marine carrier will use cryogenic storage tanks and vacuum insulation to contain the liquefied hydrogen and keep it at a very low temperature.

One of the key elements of transporting liquefied hydrogen is preventing heat from turning the liquid hydrogen back into a gas. This is known as ‘boil off’. A specialised insulation technology will be used to respond to this challenge.

How much water will the Port of Hastings plant use?
The plant will use approximately 360L/day of water during the one-year pilot. Water will be used mainly for staff amenities and make-up for cooling water systems. Water will be purchased and sourced from a water supply company.
How much electricity will the plant use?
Maximum 1MW per hour.
What is this facility going to do?
This test facility will convert hydrogen gas into liquefied hydrogen (LH2), store it, and then load it onto a specialised marine carrier for transport to Japan.
How big is the marine carrier for the pilot phase?
The marine carrier will be approximately 116 metres long and 19 metres wide.
Do you anticipate any specific impact on Western Port’s seagrasses or sea life?
No.  As we will not undertake any marine work, we don’t anticipate any impact on Western Port’s seagrasses or sea life.
Does the HESC consortium have extensive expansion plans for Western Port?
No. The HESC consortium does not have any expansion plans for Western Port.
What is involved in the liquefaction process?
The facility will liquefy hydrogen gas by cooling it to − 253°C and reducing it to 1/800th its volume. Specially made refrigeration equipment will be used.
How will the liquefied hydrogen be transported?
The liquefied hydrogen will be loaded onto a purpose-built marine carrier and transported to Japan approximately once every three months.
Will you be completing a risk assessment for the facility?
Yes, a full risk assessment process is underway. HAZID (Hazard Identification Studies) and HAZOP (Hazard and Operability Studies) have been completed for both sites. These studies identify risks and the mitigations and treatments to be used during construction and operation of the HESC Pilot.
Who is building the marine carrier?
Kawasaki Heavy Industries, is contracted by HySTRA (the Japanese Consortium), to build the marine carrier.
What route will the marine carrier take?
The exact route is still to be confirmed. It will most likely be through standard shipping channels in and out of the Port and along the east coast of Australia.
Will there be people coming here to work from outside the Port of Hastings area?
Yes. A small team of specialised piping engineers and construction and operation supervisors from outside of the Port of Hastings will assist with the construction.