Hydrogen Hype: Angus Taylor’s last throw of the dice for brown coal

by | Mar 12, 2021 | Energy & Environment

Energy Minister Angus Taylor’s plan to turn brown coal into a hydrogen export market to save the La Trobe Valley, which he described as a “significant project”, defies financial credibility, writes Brian Toohey.

The last hope for the ‘survival’ of Victoria’s brown coal industry is to turn this carbon intensive fuel into hydrogen and exported. The announcement that the Yallourn power station will close in 2028 foreshadows the complete shut-down of the remaining brown-coal fired electricity generators in the La Trobe Valley. Generators can simply no longer compete with electricity made from renewable energy, backed by battery storage.

Yet this grand vision of exporting liquefied hydrogen produced from brown coal is almost certain to be financially unviable because the processes involved require huge amounts of energy. Physics dictates that the amount of energy needed to compress and liquefy any particular gas is effectively fixed. This means there is little scope to make the process cheaper by reducing the amount of energy used.

The hydrogen will have to be compressed to minus 253°C for export in specially constructed ships. That’s 700 times atmospheric pressure. The added difficulty is that carbon dioxide (CO2) is also produced. To stop making global warming worse, the CO2 has to be captured and compressed to minus 79°C through “carbon capture and storage” (CCS). The plan is to pipe it and sequester it in reservoirs below Bass Strait.

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The Federal and Victorian governments are undeterred by the magnitude of the difficulties. In conjunction with the Japanese government and a consortium of corporations from both countries, they envisage gasifying billions of tons of dirty brown coal to produce carbon monoxide, then using a separate steam process to produce carbon dioxide (CO2) and hydrogen. A lot more CO2 is produced than hydrogen, but both have to be liquefied.

A pilot project run by the Victorian-based Hydrogen Energy Supply Chain scheme recently liquefied 150 tonnes of coal, which produced 140 tonnes of CO2 and just three tonnes of hydrogen. The Victorian and federal governments each contributed $50 million to the project. The Japanese government and the corporations added another $400 million. The pilot of shipping the hydrogen more than 8500 kilometres to Japan is yet to occur.

If the project proceeds to the commercial stage, the plan is to export 238,000 tons of hydrogen to Japan each year, in the process producing 169,000 tons of C02.

Costs blowout

But nowhere has the process of Carbon Capture and Storage been able to sequester, at a satisfactory cost, the emissions created by burning or gasifying coal. Applying CCS to a Victorian brown coal power plant, for example, is estimated to use approximately 50 per cent of the power that could otherwise be sold to the grid.

Queensland’s ZeroGen demonstration plant – combining coal gasification with CCS – was abandoned after the initial $1.2 billion estimate blew out to $6.9 billion. No significant land-based CCS operation is under way anywhere in the world.

Nevertheless, federal Energy Minister Angus Taylor gave an upbeat keynote address to the Australian Hydrogen Conference last November, during which he nominated the Victorian- based hydrogen export plan as a “significant project”.

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Not all observers are as confident. Hiroshi Kubota, professor emeritus at the Tokyo Institute of Technology, was quoted in the Australian Financial Review in December as saying, “It’s just a massive waste. I don’t think it is practical or economic for Japan at all.”

Money for nothing

In 2017 the Australia Institute, in its report Money for Nothing calculated that since 2003 “more than $3.5 billion has been committed” to a range of CCS-related programs. Because of the difficulties in finding viable projects, not all the money was distributed. But this has not stopped the Turnbull and Morrison governments allocating more money.

Other observers have noted that making use of hydrogen in Australia will not always be plain sailing. Hydrogen atoms under pressure are so small they can pass through steel pipes and welds, making them brittle. Using existing natural gas pipelines to transport hydrogen may not be feasible. Natural gas stoves and heaters would have to be replaced or refurbished to use hydrogen, which is 20 times as explosive as petrol.

At present, hydrogen is mainly used in oil refining and to produce ammonia fertilisers. ABC technology reporter James Purtill noted recently that the global use of fossil fuels such as coal and natural gas to produce hydrogen creates CO2 emissions equivalent to those of the United Kingdom and Indonesia combined.

The solution is to switch to using green energy such as solar, wind, pumped hydro and battery storage to reduce hydrogen by electrolysing water to split it into oxygen and hydrogen. This does not have the costly requirement to compress and liquefy CO2 for burial.

The cost of electrolysers is falling rapidly and is expected to keep doing so until the process is cost effective. Utilising the oxygen as well as the hydrogen would help. So would proposals to use low-cost metals such as iron and nickel as catalysts to speed up the chemical reaction while using less energy.

But trying to ship “green hydrogen” overseas looks financially unjustified because of the cost of liquefying the hydrogen. Electric cars seem to have won the battle in the motoring sector while heavier vehicles may be powered by clean biofuel or improved batteries rather than hydrogen fuel cells.

The future is green steel

The Grattan Institute last year produced a study arguing that “green steel” offers the best potential market, followed by “green ammonia”. The idea is to produce green steel by using hydrogen, rather than high emissions coal, as a reduction agent to turn iron ore to iron before it is processed into steel for export or local use.

The report, called “Start with steel”, proposes transporting Western Australia iron ore to east coast sites where coal jobs are likely to be lost. This would be cheaper than trying to produce steel at mine sites in WA where labour costs are much higher. The report estimates that 25,000 manufacturing jobs could be created. One caveat is that other countries could also make green steel for export.

What makes no sense is to continue using fossil fuels to make hydrogen.

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Brian Toohey

Brian Toohey

Brian Toohey began his career in journalism as a political correspondent at the Australian Financial Review in 1973. He edited the National Times in the 1980s and has contributed to numerous publications. He is author of Secret: The Making of Australia’s Security State.


  1. Avatar

    I read this as I (briefly) watched ABC News breakfast. They had a story on the hydrogen plant. No mention of the plant’s efficacy, just jobs, jobs, jobs.

    Didn’t CSIRO propose a means of safely shipping hydrogen as liquid ammonia a while back? What came of this idea other than the press release?

    • Avatar

      Here’s an excellent article on that subject:

      The takeaway from it is that the process is only 1 to 15% efficient, the process needs to be improved to be 70 times better to even consider. And that assumes you have unlimited free electricity and aren’t paying for catalysts which are rare and expensive. It’s an interesting lab experiment currently, nothing more.
      And like all hydrogen research ignores that batteries are mature, far more efficient and cheaper and becoming more so.

      • Avatar

        With the energy source available free of cost, efficiency is irrelevant.

        Just add a few more photovoltaic panels and a few more wind turbines.
        There is no hydrogen versus battery debate in technology circles, each has its uses – horses for courses and all that.
        And who knows, research may just come up with something of which you are unaware and which might change the scenario considerably.
        Your absolutism does you no favours.

      • Avatar

        Electricity might be free of fuel cost but still has significant capital cost. We will not have zero interest rates forever. Any process that works in Gippsland will work better near the equator. Twiggy Forest seems to have a
        good plan for hydrogen reduction of iron ore. This will be in Northern Australia.

      • Avatar

        It’s called “investment” – which includes borrowing money to cover capital costs.
        How do you think all the current coal fired power stations were built?
        On fairy dust?
        You eternal naysayers give me the tom-tits.

  2. Avatar

    Hydrogen as an energy transport mechanism only exists to greenwash fossil fuel companies. It has no place in the transport sector as batteries are cleaner, cheaper and far more efficient. Limited use in other areas also. Almost all proposed H2 generation is by refactoring natural gas and is bizarrely less efficient and more polluting than using the natural gas directly.
    It’s a sham and the government know this and perpetuate the lies around it.
    Here’s a good recent article on how even German auto manufacturers see through this: https://arstechnica.com/cars/2021/03/car-groups-throw-spanner-in-works-of-eus-hydrogen-drive/

  3. Avatar

    Brown coal to hydrogen.
    What’s wrong with electrolysis powered by clean green power?

    • Avatar

      It’s insanely inefficient and then you still have to store, compress and transport your hydrogen, none of them trivial matters and none efficient.
      Hydrogen is a boondoggle beginning to end.

      • Avatar

        …and your technical expertise is…?

  4. Avatar

    GEE, anything is better than coal, walking dead, just and dead as believing in a pandemic, where no one knows. and our immune system just stopped working in 2020 after centuries of working brilliant…. ANOTHER SCAM LIKE THE GREENS BUT ALL PART OF SUSTAINABLE DEVELOPMENT via WHO, UN, WEF and OECD…

    Why you should Q the V Passport @21WIRE

  5. Avatar

    The Explain it to the Aliens Test:
    A panel of Aliens is assessing humanity for “Demonstrations of the Existence of Intelligent Life on Earth”.

    If we are judged to not pass the test, earth will be destroyed to clear a hyperspace bypass route! (Hitchhiker’s Guide nod)

    Tell them about this proposal, then stick your fingers in your ears, there is going to be a BIG bang!

  6. Avatar

    I think Hydrogen – made with renewable energy – will be important for making steel and other industrial processes. Possibly suitable gas generators could use it (many can take high proportions of H2), substituting for gas in their role as low emissions backup to renewables.

    From fossil fuels? No. No surprise the Minister for Emissions backs making it from brown coal – he wasn’t chosen for his job because he wants emissions reduced, rather, because he doesn’t.

    I think on-site production and use is where to start, not transport fuel, not export. On site production and use doesn’t require the extreme pressures and associated engineering challenges and costs, nor requiring development of economy wide infrastructure.

  7. Avatar

    The brown coal to hydrogen proposal is ridiculous for all the reasons Brian points out. And I wonder if large-scale hydrogen via electrolysis is viable, given that it requires large amounts of water, fresh water being a scarce resource. Seawater is a possibility, but given all the fuss about existing desalination plants, would it fly politically?

    • Avatar

      “And I wonder if large-scale hydrogen via electrolysis is viable, given that it requires large amounts of water, fresh water being a scarce resource.”
      Fresh water varies in its scarcity. Sea water electolyses to hydrogen and chlorine whereas fresh water electolyses to hydrogen and oxygen. So it would just include into the natural water cycle. Both those mixtures are about equally explosive, but the hydrogen-oxygen mixture yields water (H2O) as its combustion product, not hydrochloric acid (HCl) as in the case of sea water. The brown coal idea is a natural for the COALition, given that it is in the pocket of the fossil-carbon lobby and its swarm of rent-seeking shills; Taylor being one of the more prominent ones.

    • Avatar

      A bit like the old ‘Demtel adverts’ but wait there’s more….

      The hydrogen by electrolysis does not just require ‘fresh water’ it needs PURE fresh water such as that only available from a desalination plant operated at the highest purity levels. AKA no other trace elements nor consituents other than H20.

      This is not a cheap requirement, especially not in the driest inhabited continent on the planet – Australia.

      Green hydrogen simply appears to be a (see-through) smokescreen to divert the community’s gaze away from the real issue.

      It also is a great way to divert $$billions in public funds into the pockets of a myriad of consultants & academics for hire. Remember the tobacco, asbestos, oxycodone ‘experts’ & expert studies.

      Or more recently the carbon capture rort. Strange how so many of the supporters also have mutli-million dollar houses/mansions etc etc.

  8. Avatar

    SANTOS has had a successful test of its carbon capture and storage (CCS – or should that be CC$?) process at the Moomba gas field.
    Read all about it at (fanfare please Mr Conductor):
    ‘“Australia has a natural competitive advantage in CCS with known high-quality, stable geological depleted storage basins capable of injection at a rate of 300 million tonnes per annum for at least 100 years – the same basins that have previously safely and permanently held oil and gas in place for tens of millions of years.”
    Only one problem with CCS (or CC$; whichever you prefer.)
    Unlike the hydrocarbons (oil and gas) there before it, the carbon dioxide (CO2) is water-soluble. (It is also oil-soluble.) The aqueous solution is called carbonic acid, and is the basis for beer, and all soft drinks.
    Unlike the oil and gas before it, the CO2 solution will migrate through the ground water and finish up possibly in the ocean via widespread submarine outcrops; restoring the original problem pretty convincingly. By that time, Santos will have quit the scene, taking its $$$$ with it.
    But wait! There’s more!
    In around 1500 years’ time, the Earth will commence its slow cooling descent into the next glaciation, or ‘ice age’. To manage that, our descendants are likely to need all the CO2 they can get hold of, in order to warm the planet. And to the extent that CCS is successful, they will likely curse this generation for its short-sightedness in locking the CO2 away beyond their reach.

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