Decarbonization Solution Green&Circular


Last Update:2024.01.19

Renewable Hydrogen Production in Western Australia (Yuri Project) Leading the Future of Hydrogen and Decarbonization

Mitsui has been engaged in the clean hydrogen business since 2016. To accelerate a strategic approach amid the diversification of its projects, Mitsui established the Energy Solutions Business Unit in 2020, and the Hydrogen Solutions Business Division within the business unit in April 2023 by upgrading one of the preexisting business departments. We interviewed Ms. Chiharu Tanimura and Ms. Yuka Mitsuya of the said division about the global trends in the clean hydrogen business within the overall context of the decarbonization business field and Mitsui’s initiatives, paying particular attention to the Yuri Project, which is a renewable hydrogen production project in Western Australia.

Clean hydrogen is anticipated to be utilized in the hard-to-abate sectors in which reducing CO2 emissions is particularly challenging. While reducing production costs and creating demand remain issues that hinder the widespread adoption of clean hydrogen and are believed to require more time to solve, large-scale industrial production and supply of clean hydrogen has already started in some countries. One example of this is the Yuri Project, which is Australia’s first large-scale industrial renewable hydrogen production project. Mitsui aims to build a hydrogen supply hub based on this project.

Aiming to create a global supply chain as well as a regionally produced and consumed hydrogen ecosystem

― To begin, please tell us about the Hydrogen Solutions Division and its initiatives.
Tanimura: We first initiated efforts to build a clean hydrogen value chain in 2016, and have since participated in multiple projects to date. As the projects have diversified, the need for strategic initiatives has increased. To expedite these efforts with the entire company working collaboratively, we reorganized and expanded our structure, resulting in the current Hydrogen Solutions Business Division. We aim to establish a global clean hydrogen supply chain, including to Japan and Asia. Simultaneously, we strive to create a regionally produced and consumed hydrogen ecosystem that connects the value chains within the region, with particular focus on hydrogen-advanced regions.
Chiharu Tanimura, Global Hydrogen Dept., Hydrogen Solutions Business Division, Energy Solutions Business Unit, Mitsui & Co., Ltd.
Joined Mitsui in 2009. Engaged in oil trading/logistics business and asset management of oil and gas upstream business at Energy Business Unit I. Currently, she is in charge of business origination of clean hydrogen, focusing on regionally supplied and consumed hydrogen projects in Australia and the Asia Pacific region.

Hydrogen anticipated to be utilized in the hard-to-abate sectors in which reducing CO2 emissions is particularly challenging

― While it is commonly believed that realizing a hydrogen-based society will take time, how is hydrogen positioned among the various solutions for decarbonization?
Tanimura: Currently, countries and companies worldwide are actively promoting the use of renewable energy, the development of next-generation fuels, emissions trading, and other decarbonization solutions, aiming to achieve the goal of net zero emissions by 2050. Hydrogen, in particular, is anticipated to play a crucial role in the "hard-to-abate sectors," in which reducing CO2 emissions is particularly challenging. Specifically, hydrogen is expected to be used in the chemical sector, replacing fossil fuel-derived hydrogen as the feedstock, in industrial sectors such as steelmaking, which requires ultra-high-temperature heat which is difficult to obtain from electricity, and to power the heavy machinery used in mining and other applications.
─ Hydrogen is recognized as a clean energy source that emits no CO2 on combustion.
Tanimura: Hydrogen is currently utilized in various fields and applications, but the majority is fossil fuel-derived hydrogen produced from natural gas or coal, known as "gray hydrogen", that emits CO2 during production. In contrast, "renewable (green) hydrogen" is produced by electrolyzing water using renewable energy, emitting no CO2 both during combustion and also throughout the production process. Another variant is "blue hydrogen," which emits less CO2 by capturing and storing (CCS: Carbon Dioxide Capture and Storage) the CO2 generated during the production of hydrogen derived from fossil fuels.
─ That is why "clean hydrogen" is attracting so much attention, isn't it?
Tanimura: Clean hydrogen (green or blue hydrogen), which emits no or less CO2, is anticipated to be utilized in fields in which decarbonization is especially challenging. Despite the time required for industrialization, we view it as an essential solution for achieving carbon neutrality. Given such expectations for hydrogen, the global demand, which currently stands at approximately 90 million tons per year, is projected to grow to approximately 660 million tons by 2050.

Leading regionally produced and consumed renewable hydrogen projects overseas

─ What challenges hinder the widespread adoption of renewable hydrogen?
Mitsuya: The highest barriers to the diffusion and expansion of renewable hydrogen are its high production and transportation costs compared to existing fuels and products, as well as the challenges involved in promoting its adoption for various applications, such as in vehicles and machinery. Given the production of renewable hydrogen relies on renewable energy, efforts to reduce the cost of procuring renewable energy are particularly desirable. Demand for renewable hydrogen varies across countries and regions, with growth anticipated in sectors seeking alternatives to gray hydrogen particularly in the chemical sector, such as for refineries and petrochemicals, as well as in the mobility sector, such as for fuel cells, and marine and aviation fuel. Also, as supply chains are established, a surge in demand for hydrogen is also anticipated in large-scale hydrogen power generation, including co-firing, and hydrogen-reduction steelmaking.
Yuka Mitsuya, Global Hydrogen Department, Hydrogen Solutions Division, Energy Solutions Business Unit, Mitsui & Co., Ltd. (seconded to MIT Hydrogen Australia Pty Ltd).
Joined Mitsui in 2008. After working in strategic planning at the Energy Division and on an M&A project in the LPG business in Japan, she was involved in the oil and gas production and development business. Since 2018, she has been engaged in the new business development of hydrogen and clean ammonia, and helped to realize Mitsui’s participation in the Yuri Project in Australia. Currently, she is a director of the Yuri operating company, a joint venture with ENGIE, and responsible for hydrogen and clean ammonia business origination (in Melbourne) at Mitsui.

─ Is renewable hydrogen already widespread in hydrogen-advanced regions?
Mitsuya: While there is a general anticipation that overcoming those challenges and promoting the use of hydrogen will take time, the hydrogen-advanced countries of Europe and the United States have already begun the construction of large-scale industrial renewable hydrogen production facilities (of the several hundred MW class) to meet regional hydrogen demand. As there are only few such facilities now, we aim to establish and expand a clean hydrogen ecosystem through early participation in such advanced projects.
─ In Japan, which is not a hydrogen-advanced country, what kind of initiatives do you plan?
Mitsuya: Japan has its own hydrogen strategy and recognizes the importance of hydrogen toward achieving carbon neutrality. However, the country's small size and limited capacity to supply renewable hydrogen from its own renewable energy sources, along with the limited availability of CO2 storage sites for blue hydrogen, such as depleted oil fields, make it challenging to meet all of its hydrogen demand through domestic production alone. Therefore, we are working to establish a stable hydrogen supply chain for Japan, with the aim of importing competitive clean hydrogen from overseas.

Yuri Project expected to become Australia's hydrogen supply hub

─ Please provide an overview of the Yuri Project, the renewable hydrogen production project in Western Australia, in which Mitsui participates.
Mitsuya: The Yuri Project is owned and operated by a joint venture between Mitsui and the French electricity giant, ENGIE S.A. The project aims to produce renewable hydrogen in the Pilbara region of Western Australia by installing a solar plant (18 MW) and a hydrogen production system (10 MW). The renewable hydrogen produced by the Yuri Project will be supplied to Yara Pilbara Fertiliser Pty Ltd., a wholly owned subsidiary of Yara International ASA, a major nitrogen-based fertilizer manufacturer, for use as a feedstock for clean ammonia. Production is expected to commence in 2024.
An image of the renewable hydrogen production plant
─ What is the significance of participating in this project?
Mitsuya:​ Australia, with its vast tracts of land, is globally recognized as one of the most promising countries for future competitive renewable hydrogen production thanks to its high potential for producing renewable energies such as solar and wind power. The Yuri Project is the first industrial-scale renewable hydrogen project in Australia and is anticipated to become a hydrogen supply hub. Meanwhile, the project will supply renewable hydrogen for ammonia production, one of the hard-to-abate sectors. Ammonia plays a vital role in various industries, such as agriculture and chemicals, and is also anticipated to become an energy resource in the future. In this regard, we recognize the substantial social importance of this project.
─ I am sure that the Yuri Project, if it progresses smoothly, will have a ripple effect in various areas.
Mitsuya:​ Mitsui is engaged in various business areas in Western Australia, including in metals, energy, and chemicals. Through our participation in this project, we aim to establish a model of a regional hydrogen production and consumption project in Australia. This involves not only expanding the existing renewable hydrogen production base for ammonia, but also transforming the Pilbara region of Western Australia into a hydrogen supply hub as we capture demand in the surrounding areas. Going forward, we will also aim to establish a global supply chain, including the supply of competitive clean hydrogen to Japan, by leveraging our extensive global network.
Ms. Mitsuya with project team members from ENGIE, Mitsui’s business partner in the Yuri Project (in Melbourne)

Becoming a low-carbon, zero-emission energy supplier

─ I see. So, what is your vision for the future?
Tanimura: Reducing production costs and promoting the applications of hydrogen are essential for growing the widespread use of hydrogen, and through our participation in the Yuri Project, we are taking the first steps toward achieving these goals. In the future, by expanding the scale and reducing costs, we aim to create export opportunities to Japan and other Asian countries and contribute to the reduction of greenhouse gas emissions in these regions, and ultimately to realize carbon neutrality. Additionally, by supplying renewable hydrogen to existing ammonia plants on a commercial scale, Mitsui aims to acquire expertise in renewable hydrogen production and supply for industrial applications. Our goal is to expand not only within Australia but also into other countries and regions.
─ Finally, what dreams do you wish to achieve through the Yuri Project with regard to a decarbonized society?
Tanimura: As an energy supplier, Mitsui has been responsible for the stable supply of various energy resources such as liquefied natural gas, oil, and coal. As the world moves toward decarbonization, we aim to contribute not only to the stable supply of energy, but also to the development of a low-carbon and zero-emission society.
Mitsuya:​ Achieving zero emissions is a global challenge, and hydrogen is the ultimate zero-emissions fuel. Through our participation in this project in Australia, a country with high potential for clean hydrogen, we hope to acquire experience in the commercial-scale hydrogen production business and know-how in project development and operation, and contribute to a sustainable future as a global hydrogen supplier.
─ ─ Thank you very much for your time today.

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