Work has commenced in the Latrobe Valley on a new facility for the world’s largest hydrogen export pilot project, setting Victoria up as a future global leader in hydrogen.

Minister for Economic Development Tim Pallas today joined J-Power Chairman Masayoshi Kitamura at AGL’s Loy Yang site in Traralgon to mark the beginning of construction of a gasification facility.

Here, Latrobe Valley brown coal will be turned into hydrogen gas as part of the world-first Hydrogen Energy Supply Chain (HESC) Pilot.

The hydrogen gas will then be transported to Port of Hastings where it will be liquified and shipped to Japan for use in fuel cell vehicles and power generation.

Backed by the Andrews Labor Government, the HESC Pilot will boost local industry knowledge and expertise in the production and use of hydrogen, while also boosting jobs.

This has the potential to put Victoria at the forefront of the fast-growing hydrogen industry, which is expected to be worth $2.5 trillion globally by 2050.

The pilot is expected to create 400 jobs in the Latrobe Valley and Hastings regions across the life of the project, with the potential for thousands more if the project proceeds to the commercial phase.

The HESC Pilot Project is being developed by a consortium of Japan’s top energy and infrastructure companies, including Kawasaki Heavy Industries, J-Power, Iwatani Corporation, Sumitomo Corporation and Marubeni Corporation.

The pilot will be required to offset all the minimal greenhouse gases produced. Successful carbon capture and storage is a necessary condition for the program to progress to full commercial scale.