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Japanese start producing hydrogen from brown coal in Australia.

A Japanese-Australian venture has begun producing hydrogen from brown coal in a A$500 million ($387 million) test project that aims to show liquefied hydrogen can be produced and exported safely to Japan, the project sponsors said.

Japan’s Kawasaki Heavy Industries is running the pilot project with government financial support from both Japan and Australia in the state of Victoria.

The project is key to helping Japan meet its target of net zero carbon emissions by 2050. The world’s fifth-largest energy consumer aims to boost its annual hydrogen demand tenfold to 20 million tonnes by 2050, equivalent to about 40% of its current power generation.

At the same time, Australia is pushing to become a major hydrogen exporter, eventually rivaling its dominance in global liquefied natural gas (LNG) trade, which could potentially give it a greener market for its coal and gas.

Brown coal is considered the lowest rank of coal due to its relatively low energy content and has long fueled some of Australia’s dirtiest power stations, some of which have already shut or are slated for closure.

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