New research has found a project using Victorian brown coal to make hydrogen is unlikely to meet its claimed emission reductions.
The Hydrogen Energy Supply Chain project aims to test if it is possible to produce hydrogen from coal for export.
The first shipment of liquefied hydrogen created from coal mined at the Loy Yang brown coal mine in the Latrobe Valley was shipped to Japan this year.
A consortium of Japanese and Australian companies, including Kawasaki Heavy Industries, Japanese energy giant J-Power and AGL, which owns Loy Yang, are behind the pilot.
But to reach commercialisation stage the consortium will rely on carbon capture storage to lower emissions and make it carbon neutral.
The consortium plans to use the Victorian government's Carbon Net, which is still in development phase.
The federal and Victorian governments have provided more than $50 million toward the supply chain pilot.
Emissions Reduction Minister Angus Taylor and the consortium said the project would reduce emissions by 1.8 million tonnes a year if it reached commercialisation.
They said that would be equivalent of emissions from 350,000 petrol cars.
Think tank says emissions claims is misleading
Independent public policy think tank the Australia Institute says it has obtained freedom of information documents that reveal this emission claim is misleading as it compared the project with other hydrogen gas projects, which didn't use carbon capture storage.
Australia Institute emerging climate and energy program director Richie Merzian said the supply chain project would add between 2.9 and 3.8 million tonnes of CO2 emissions if it was compared with renewable hydrogen production, without carbon capture storage.
He said that was equivalent to adding 550,000 to 735,000 petrol cars to the road.
"Those numbers make incorrect comparisons (so) it seems like this project will reduce emissions when we know it will actually increase," he said.
However a spokesperson for the Coalition government said the coal hydrogen emission reduction estimate, including carbon capture storage technology, was reached using figures from the International Energy Agency and the CSIRO.
"Both the International Energy Agency and the UN's Intergovernmental Panel on Climate Change have recognised carbon capture and storage technologies as being crucial to meeting global emissions reduction targets," the Coalition campaign headquarters spokesman said.
Hydrogen Energy Supply Chain consortium spokesman Jeremy Stone said the Australia Institute's analysis was "factually incorrect" because they were assuming carbon capture storage would not be part of the project.
"Our calculations on carbon reductions ... is about what will happen when Hydrogen Energy Supply Chain proceeds with carbon capture and storage," he said.
"We have now produced pure hydrogen through gasification of a mix of biomass and coal, providing us with the potential of commercially producing carbon neutral and maybe carbon negative hydrogen (when combined with carbon capture storage)."
Debate over carbon capture storage
Mr Merzian said the supply chain trial should not be labelled as "clean hydrogen" because carbon capture storage had been a "colossal failure".
Carbon capture storage involves capturing carbon dioxide at the site of production then pumping it deep underground where it can migrate into porous substrate, such as sandstone, and be trapped.
"The reason why we still talk about carbon capture and storage is because fossil fuel companies wanted it as a marketing tool to pretend they can clean up their act and continue to expand their footprint," Mr Merzian said.
The Coalition government spokesperson said there were 29 commercial carbon capture storage facilities operating globally and more than 100 projects were in various stages of development.
Esso Australia, which has oil and gas operations off Victoria's coast, was recently given about $40 million in federal government grants for its South East Australia Carbon Capture and Storage Hubs project.
Esso was contacted for comment.
"The only way we'll get these technologies to maturity is by making sensible investments in their development and deployment," the Coalition spokesperson said.
Australians confused by 'clean hydrogen'
The Australia Institute also released polling revealing many people were confused by the term "clean hydrogen".
Only one fifth the 1007 people polled knew its correct definition, which was set by the federal government and used hydrogen made using fossil fuels and carbon capture storage or with renewable energy.
The polling showed 42 per cent in the survey thought "clean hydrogen" was limited to hydrogen using renewables, a zero emissions process.
"The polling shows that people don't know what clean hydrogen is, (so we) need to ditch that term and just call things as they are," Mr Merzian said.
