Australia’s top research agency this month announced a breakthrough that could create a hydrogen export industry targeting Japan.

Scientists at the Commonwealth Scientific and Industrial Research Organisation (CSIRO), in Canberra, unveiled a membrane technology that separates ultra-high purity hydrogen from ammonia, while blocking all other gases.

The development is seen as a major step in overcoming a drawback for renewable hydrogen: the fact that it is difficult and costly to store and move around.

“This technology will pave the way for bulk hydrogen to be transported in the form of ammonia, using existing infrastructure, and then reconverted back to hydrogen at the point of use,” said CSIRO in a press release.

CSIRO’s chief executive Dr. Larry Marshall called the announcement “a watershed moment for energy. We look forward to applying CSIRO innovation to enable this exciting renewably sourced fuel and energy storage medium a smoother path to market," he said.

The membrane breakthrough comes amid growing interest in exporting hydrogen from Australia to Asian markets, and predominantly Japan, which leads the way worldwide in the deployment of fuel-cell vehicles. At present, hydrogen is produced using fossil fuels.

But advocates hope to use surplus energy from Australia’s growing solar and wind industries to provide the power for hydrogen production. Last month, the Australian Renewable Energy Agency (ARENA) published a vision of renewably sourced hydrogen being exported to Japan.

“Renewable energy could drive Australia’s next resource boom as demand for hydrogen surges worldwide,” it said.

The Japanese have invested more than AUD $16 billion (USD $12 billion) on hydrogen research and development and are looking to deploy at least 6,000 fuel-cell cars and 100 buses in Tokyo for the 2020 Olympics, it said.

ARENA also noted that there are already two projects aiming to get Australian hydrogen to Japan.

One, being promoted by Kawasaki Heavy Industries with support from the Commonwealth and Victoria governments, involves shipping non-renewable hydrogen made by gasifying brown coal.

The other project, being developed by Northern Oil with support from the Queensland government, would see solar energy being used to power an electrolyzer for green hydrogen production at Yarwun. The site, close to Queensland’s largest cargo port, would make it easy for the hydrogen to be shipped to Japan on specially designed tankers being developed by Kawasaki Heavy Industries, ARENA said.

Separately, in July ARENA announced AUD $1.5 million (USD $1.1 million) for a green hydrogen innovation hub at Jandakot, Western Australia. There, the gas company ATCO will trial the production, storage and use of renewable hydrogen in a commercial-scale microgrid.

Green hydrogen will be produced from on-site solar using electrolysis, fueling a range of appliances after being blended into a natural gas pipeline, ARENA said.

Phil O'Neil, a senior associate at Advisian, WorleyParsons Group's global consulting business, said Japan and South Korea could both be interesting export markets for Australian renewable hydrogen.

In 2016, South Korea announced plans to switch 26,000 buses from compressed natural gas to hydrogen. And in July this year, the country’s Ministry of Trade, Industry and Energy pledged to establish special-purpose companies to speed up the rollout of hydrogen fueling stations.

“Australia is a well-trusted energy partner for these countries,” O’Neil said. “I think they would be open to the development of green hydrogen in Australia.”

But working out how to get hydrogen to these Asian markets was a key challenge, he said. “Ammonia plants are an interesting place to start,” he said. “That’s a chemical that’s already understood and can be transported around the world.”

Even with the transport issue coming closer to being solved, though, it might be premature for Australia to get too excited about the prospect of a hydrogen export industry. Compared to electric vehicles, “hydrogen hasn’t really taken off,” said Timotej Gavrilovic, a contributing analyst at Wood Mackenzie Power & Renewables. “The number of hydrogen-based vehicles has been pretty small.”

And with battery-powered electric vehicles still only slated to have a penetration of around 10 percent by 2030, the chances of a major boom in fuel-cell cars by the same time is small.