Hydrogen demand from China, India not guaranteed
Major energy consumers China and India are unlikely to be viable hydrogen export markets for Australia.
Major energy consumers China and India are unlikely to be viable hydrogen export markets for Australia as they are expected to develop substantial domestic production for their own use, says Japanese hydrogen developer Chiyoda.
The federal government has set out a goal for Australia to become a major global hydrogen player by 2030 and a top three exporter of the fuel to the Asian markets.
But Chiyoda, which has just established the world’s first global hydrogen supply chain, said traditional consumers of Australia’s exports in the two Asian nations may not ultimately be buyers of Australia’s eventual supplies.
“A lot of people are saying become a big hydrogen exporter to India and China where traditional LNG markets are,” Chiyoda Oceania chief executive Andrew Tan told The Australian. “But I’ve got a different view as I don’t think China and India would need to import hydrogen because they’re going to do it themselves.”
Big gas industry players including Western Australia’s Woodside Petroleum have started to position themselves to take prime spots developing the fuel. The LNG producer recently agreed a joint study with Korea Gas Corporation as expectations grow for the fuel to eventually mirror LNG and develop into a major export opportunity.
Mr Tan said it may take time for export options to fully open up for Australian players. “Companies understandably want to make sure when the hydrogen bandwagon is off and running they’re not left behind. Markets like Japan and South Korea will emerge but it’s a finite market.”
Japan expects to import 300,000 tonnes of hydrogen by 2030 from just 4000 tonnes next year.
Chiyoda said an important first step along that path is its just-launched global supply chain. It spans a hydrogenation plant in Brunei with the fuel then transported to the Japanese industrial city of Kawasaki through Chiyoda’s Spera technology process, which transports hydrogen as a liquid at ambient temperature and pressure using existing infrastructure.
The small project with capacity of 100 tonnes a year had a long gestation after a successful pilot scheme in 2014. Critically, it has the backing of the Japanese government through its New Energy and Industrial Technology Development Organisation and aims to push the fledgling industry into a commercial export-led enterprise.
Chiyoda, which partnered with Mitsubishi, Mitsui and Nippon Yusen Kabushiki Gaisha on the facility, said hydrogen will, in the medium term, work alongside LNG rather than seek to replace it in the market. Beyond 2030, the company expects to eventually become a major player in supplying power stations in the region.
Cost remains a hurdle, with estimates hydrogen is about six times the price of conventional fuels. But Chiyoda expects that will quickly fall as more players enter the market.