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Climate Change

Sumitomo enters 'green hydrogen' business in Australia

Japanese trading house to use solar power in tie-up with plant engineer JGC

Sumitomo wants to start slowly in Australia, then gradually ramp up electrolyzer production as the market grows. (Source photos by EPA/Jiji and Kyodo) 

TOKYO -- Japanese trading company Sumitomo Corp. will begin producing "green hydrogen," which is made without emitting carbon dioxide, Nikkei has learned.

Sumitomo will set up a production facility in Australia with Japanese engineering company JGC Holdings and produce hydrogen using small solar-powered electrolyzers.

The project is estimated to cost less than 1 billion yen ($9.6 million). Each device produces 300 tons of hydrogen annually, which can power about 3,000 fuel cell vehicles. The gas will be supplied to local factories and fuel cell buses.

Hydrogen is seen as a green energy source during use, but its production results in the emission of greenhouse gases.

Hydrogen does not generate these gases even when burned, but CO2 is emitted in the process of extracting it from fossil fuels and producing it in large quantities. Making it by electrolyzing water using renewable energy does not produce CO2 but has been prohibitively expensive.

Sumitomo and JGC will develop a small water electrolyzer, which is about the size of two shipping containers. It is easier to transport than larger, conventional electrolyzers, and its small size offers more flexibility for installation.

The first facilities will be installed in Australia, where the cost of solar power is among the lowest in the world. Sumitomo aims to start production in 2023.

Australia aims to make green hydrogen at under 2 Australian dollars per kilogram in the future -- one-fifth the cost of that in Europe. This outlook helped convince Sumitomo to set up operations in the country.

Sumitomo will launch the business on a small scale then increase electrolyzer production as sales channels expand.

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