![]() Support for a coal to hydrogen industry comes despite the Victorian government’s opposition to onshore oil and gas extraction and its objection to the three Latrobe Valley coal-fired power stations receiving funding under the “capacity mechanism” scheme, which seeks to reward generators that can deliver power at any time of day. The Victorian government has supported the HESC project as a way to help the Latrobe Valley, where three coal-fired power stations are the only source of demand for an enormous brown coal resource. “The amount of Japanese government funding is quite massive compared to the funding support from the Australian government,” she said. The HESC project has in the past six years received $100 million of funding from the Victorian and federal governments to establish pilot facilities, and while the Japanese government funding will be delivered incrementally as the project passes defined milestones, Ms Fukuma said the Japanese government had set a new benchmark for taxpayer support. “Focus on some key projects with some much more deep funding to accelerate their pathways to successfully complete and go to the commercial ,” she told The Australian Financial Review. The Albanese government is now working to “revise and refresh” its four-year-old hydrogen strategy and Ms Fukuma encouraged the Albanese government to prioritise a small number of projects and concentrate funding support on them rather than spread taxpayers dollars across the fast-growing but nascent hydrogen industry. The Albanese government last year cancelled $250 million of grants designed to help fossil fuel producers install carbon capture and storage under a plan to redirect public funding toward CCS innovation for ‘hard to abate’ sectors like cement and emerging negative carbon industries like “direct air capture”. Japan’s support for Victoria’s Hydrogen Energy Supply Chain project comes as Australian companies like Woodside and Fortescue pursue hydrogen projects in the US to tap into incentives offered under US President Joe Biden’s $US437 billion Inflation Reduction Act (IRA), and as pressure grows on the Albanese government to respond to the massive incentives being offered abroad for green innovations. Kawasaki Heavy Industries executive Yuko Fukuma said the decision by Japan’s ¥2 trillion ($21.7 billion) Green Innovation Fund would stimulate investment in port and liquefaction infrastructure at the Port of Hastings and bring to life a plan to convert Latrobe Valley brown coal into low carbon hydrogen. The project is backed by the federal and state government as a way to stimulate economic activity in the Latrobe Valley, despite the Victorian government’s long-held opposition to onshore oil and gas extraction. Japan will allocate $2.35 billion toward a project that will use carbon capture and storage to convert Australia’s dirtiest coal into clean hydrogen for export to Japan.
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