Japan’s Iwatani exits Australia green hydrogen project
OSAKA — Japanese gas company Iwatani will withdraw from a green hydrogen project in Queensland, Australia, following the exit of other Japanese companies and the state government amid growing global headwinds against decarbonization.
Iwatani had teamed up with Japanese trading house Marubeni, Japanese utility Kansai Electric Power, Australian energy company Stanwell and Singaporean conglomerate Keppel to produce 70,000 tonnes of green hydrogen per year by around 2028. Some of the hydrogen was to be imported to Japan.
The state of Queensland announced last month that it would halt further investments in the project, making it difficult to continue. Iwatani has closed its office in Queensland.
Hydrogen does not emit carbon dioxide when burned and is considered a valuable next-generation energy source in industry, automobiles, power generation and other areas. Green hydrogen is produced using renewable energy to split water molecules, further reducing the environmental impact.
However, the renewable energy required to produce green hydrogen is still expensive in Japan, so most of it has to be imported. The Queensland effort was one of the more advanced projects in building a hydrogen supply chain for Japan.
Iwatani has made the supply of hydrogen for industrial uses such as liquid crystal manufacturing a business pillar and has the top share in domestic sales. After hydrogen began attracting attention as a decarbonized fuel, the company rushed to invest in the entire supply chain, including procurement, production and sales.
The cost of producing hydrogen remains high. In addition to setting up production facilities, hydrogen needs to be kept at minus 253 C to be transported as a liquid. At present, it is said to be difficult to make a hydrogen business profitable without public subsidies.
The movement to scale back hydrogen-related businesses is beginning to spread. Kawasaki Heavy Industries had planned to carry out a trial to transport hydrogen produced from lignite, or brown coal, from Victoria, Australia, to Japan, but faced mounting delays. As a result, it switched to procuring hydrogen domestically.
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Japan’s Iwatani exits Australia green hydrogen project, source
