Taylor quietly tips $3m into another brown coal to hydrogen venture

The Morrison government has quietly promised millions in new funding for a brown coal to hydrogen project in Victoria, rejecting competing proposals from renewable energy projects.

The funding for the brown coal to hydrogen project was quietly announced by federal energy minister Angus Taylor and Gippsland Nationals MP Darren Chester earlier this week.

Alongside $40 million in grants provided to two carbon capture and storage projects being developed by a subsidiary of oil and gas giant ExxonMobil, an additional $3 million was provided to the Latrobe Valley Blue Hydrogen project – converting brown coal to hydrogen.

The funding for the Latrobe Valley Blue Hydrogen project was awarded to a company called ‘Zero Degrees Rosella’, which has minimal history in Australia, but is affiliated with the US-based 8 Rivers Capital.

Earlier in the election campaign, the same company was awarded a $5 million grant to undertake a Queensland feasibility study into a new method of using coal for electricity generation – potentially leading to a new coal fired power station.

Both projects appear set to trial a Allam-Fetvedt Cycle engine, a new technique uses carbon dioxide as the working fluid (as distinct from steam used in conventional thermal power stations), offering higher thermal efficiencies and the potential of easier capture and storage of the emissions from coal fuel. However, the technique has yet to achieve large-scale deployment.

RenewEconomy understands that a number of Victorian-based renewable hydrogen projects bid for funding under the Clean Hydrogen Industrial Hubs Design and Development grant program – but missed out to the fossil hydrogen projects.

The funding is the latest in a steady stream of Coalition funding promises being poured into an earlier $500 million brown-coal to hydrogen demonstration project that ultimately delivered just 1.6 tonnes of hydrogen.

Announcing the latest funding, Chester suggested that the Morrison government was backing ‘serious investments’ in renewables – despite no renewable energy projects receiving funding.

“The Latrobe Valley has been a powerhouse for Victoria and as we transition serious investments in renewable technologies and infrastructure in our region, we will keep our energy sector workers employed and ensure they are not forgotten,” Chester said.

“It is essential all levels of government continue to work with the community to ensure the respect and care is shown towards the Latrobe Valley community.”

The latest, quietly announced, funding commitments takes the tally of Morrison government funding for fossil hydrogen projects announced during the election to beyond $400 million.

Throughout the campaign the Coalition has promised $500 million in funding to eight ‘hydrogen hubs’ planned across regional parts of the Northern Territory, Western Australia, Queensland, South Australia and New South Wales.

Just one of the proposed hydrogen hubs plans to use renewable energy to produce hydrogen, the Tasmanian Green Hydrogen Hub, with the remaining seven projects planning to produce hydrogen from fossil gas supplies paired with carbon capture and storage.

A further $23 million has been provided to nine ‘development and design projects’ to fund pilot projects, like that of the La Trobe Valley brown coal to hydrogen project.

This funding has predominantly gone to fossil fuel companies, including Santos, Origin Energy and Inpex.