Reality check on a half-billion-dollar brown coal hydrogen project
The half-a-billion-dollar pilot brown coal to hydrogen project has been launched on Thursday to much fanfare. But is it another white elephant for the government, creating a new source of carbon emissions, or will it help make Australia a new energy world leader?
The CSIRO believes that despite the infancy of coal to hydrogen programs, the technology is – for the most part – proven in the field.
"This will be quite successful once the technology is proven up," CSIRO acting director for energy Karl Rodrigues said.
"Coal gasification has been done around the world for decades and the process for cleaning the gasses is well established, transport can be done.
"The pilot phase will establish a lot of connections between the value chain and the economics of it. It looks promising."
However, capturing the emissions produced when the brown coal is turned into gas will be a sticking point.
Although Mr Rodrigues has a history in carbon capture and storage (CCS), he said this technology is still in its early days and "being proved up", pointing to Chevron’s $2.5 billion CCS project at the Gorgon LNG plant, which has already encountered carbon storage issues.
Environment Victoria’s energy advisor Erwin Jackson said the project can’t go ahead without carbon capture.
"You can’t produce hydrogen from coal without creating carbon, and without CCS this can’t work," Mr Jackson told Fairfax Media.
"If the government is going to spend $100 million of taxpayers money they need to be transparent on its pathways to reduce emissions."
Simon Holmes à Court, a senior energy advisor, believes the future of the project should rest on its ability to safely capture carbon emissions.
'Some of the dirtiest fuel possible'
"While hydrogen itself is a clean fuel, using brown coal to produce hydrogen fuel is highly polluting. Unless and until this project captures and stores its emissions, the project will produce some of the dirtiest fuel possible," Mr Holmes à Court said.
"The project should only receive federal and state support and environmental approvals if 100 per cent of the carbon dioxide is captured and safely stored."
During the pilot program there will be no carbon capture and storage, the project’s coal supplier AGL said.
"The amount of hydrogen being produced for the pilot is small and the emissions released are expected to be minimal, however, to mitigate the impact, carbon offsets will be purchased by the consortium," AGL said.
"If expanded in the future, project partners recognise the need for carbon capture and storage."
This isn’t the first tilt at coal gasification in the Latrobe Valley.
HRL previously tried to build a 600-megawatt power plant fueled by gasified brown coal, with a $50 million grant for the Victorian government, however, the plan failed and HRL was forced to return some of the funds.