Victorian government plans to work with a Japanese company to produce hydrogen from brown coal in the Latrobe Valley are “a way of making brown coal look green”, according to one expert.

The proposed plant, which would be run by Kawasaki Heavy Industries as part of their Kawasaki Hydrogen Road project, would produce liquid hydrogen that would then be exported to Japan to be used in hydrogen-powered vehicles.

Maritime authorities from both Australia and Japan signed a world-first deal to ship liquid hydrogen in Canberra on Wednesday, but Victoria’s acting resources minister, Philip Dalidakis, said the project was still “in the very early stages”.

Dalidakis said the Victorian government has been working with Kawasaki Heavy Industries and the commonwealth on an engineering study to investigate the feasibility of producing hydrogen from brown coal.

He told Guardian Australia the state government was “keen to explore all serious investments that have the potential to create much needed jobs in the Latrobe Valley”.

Latrobe’s Hazelwood power station will close on 31 March, with a loss of up to 1,000 jobs. It was considered to be the dirtiest power station in Australia.

Dr Patrick Moriarty, an expert in alternative energy and hydrogen fuel from Monash University, said replacing the power station with a hydrogen fuel plant was “a way of making brown coal look green”.



“It would be a newer plant… so it could be said to be cleaner on that side of it,” he said. “But it would do nothing for the climate in terms of how you would use it.”

Brown coal is converted to hydrogen by being partly combusted to produce carbon monoxide and hydrogen. The carbon monoxide is then mixed with steam to produce more hydrogen, and carbon dioxide.

The Japanese prime minister, Shinzo Abe, who will meet the Australian prime minister, Malcolm Turnbull, on Saturday, is pushing to turn Japan into a “hydrogen society” with plans for 40,000 hydrogen-powered cars on the road by 2020, growing to 800,000 by 2030. It is tied to a $100m commitment to power the car fleet for the 2020 Tokyo Olympics with hydrogen.

But Moriarty is skeptical of the environmental benefit of such a push, saying the economic and carbon cost of transporting liquidised hydrogen negated the reduction in carbon emissions from the fuel itself.

Tania Constable, chief executive of CO2CRC, a Melbourne-based company that promotes carbon capture and storage technology, said it was a reasonable proposition because the volume of brown coal left in the Latrobe Valley was “massive and cheap”.

“It is completely reasonable to burn brown coal and turn it both into hydrogen-based electricity for Victoria and export the hydrogen for other purposes, as long as the CO2 from the brown coal can be captured and stored,” she said.

Constable said using brown coal to create hydrogen was a clean alternative to a coal-fired power station and more consistently reliable than other alternative energies such as wind and solar, which are “dependent on climatic conditions”.

The Victorian government is currently trialling a carbon capture project, called CarbonNet, in the Latrobe valley.