Japan Looks to Australia for Hydrogen Boost

Russia’s invasion of Ukraine will lead to an acceleration of the global transition to renewable energy. This presents a significant opportunity for Australia, with its potential to be a renewable energy superpower. Japan has recognized this potential and is investing heavily in Australia’s production of hydrogen, a fuel that produces only water when burned. Currently the fuel is not cost effective compared to other fuels, and its green credentials are subject to how the gas is produced, but these are hurdles that Japan feels Australia can overcome.

Japan’s mountainous and forested geography makes large-scale production of renewable energy difficult and nuclear power has lost public support since the Fukushima meltdown in 2011. But Japan sees great potential in hydrogen and has plans to become a predominantly hydrogen-fueled society by 2050. Australia’s 2019 National Hydrogen Strategy was heavily reliant on Japanese investment and consumption for its aims.

Japanese companies have invested in a hydrogen liquefaction plant at the Port of Hastings in Victoria, and built the world’s first purpose-built liquid hydrogen carrier ship, the Suiso Frontier. The vessel returned from Hastings to Japan with its first shipment in late February.

However, the production of hydrogen on an industrial scale is energy intensive itself, making how it is produced the critical component in its status as a clean energy source. While hydrogen produces no carbon dioxide when used, the production of hydrogen from procedures such as the gasification of coal (one of the most effective ways to produce the gas) still requires considerable energy.

Current Australian production of hydrogen at the Port of Hastings is primarily created by fossil fuels, making it simply another carbon-heavy energy source. Japanese emissions may be less due to the use of hydrogen, but Australia’s won’t be. Japan is simply transferring the generation of emissions onto Australia.

Yet in April the Osaka Gas Company announced that it would be providing technical support for a $10.75 billion hydrogen project in the Northern Territory called Desert Bloom Hydrogen. The project’s plan is to suck moisture out of the air and use solar power to split the water into hydrogen gas. The process would be a fully green production of the fuel. The project has a target of producing 410,000 tonnes of hydrogen annually, and would be cost competitive with other fuels within five years. The plant aims to be at the very cutting edge of current hydrogen energy technology.

Australia is viewed by Tokyo as a crucial partner that has the capability to quickly establish a sophisticated industrial hydrogen production industry, and most importantly, be trusted to deliver for its ambitious energy revolution. With Tokyo considering cutting off its supplies of Russian gas, there is a prospect of accelerating the timelines on making Japan more hydrogen fueled and Australia more proficient in its production.

Upon Russia’s invasion of Ukraine, German Foreign Minister Christian Lindner suggested that Germany would need to rapidly find a way to increase its production of renewable energy to reduce its dependence on Russian gas. He described renewables as “freedom energy.” The war in Ukraine has made where they get their energy from central to countries' strategy calculations.

Japan’s plan to become a hydrogen-fueled society will make it reliant on other countries for its power generation. However, Tokyo has made the strategic calculation that Australia is now one of its closest and most trustworthy friends, and that an intimate energy relationship between the two countries is no threat to Japan’s ability to maneuver.

The cooperation between the two countries on renewable energy is forming a new major pillar of a relationship that has been moving ever closer over the past decade. The two countries share the same concerns about an assertive China and an unstable and unreliable United States. Their security relationship has been tightening alongside their economic cooperation.

For Australia, Japanese investment and technical know-how is essential for being able to move its economy away from a reliance on coal and gas. If Australia can be at the forefront of hydrogen power technology and production it may just be a step toward the necessary future-proofing of its economy.