Rio Tinto and Sumitomo to build ‘first-of-a-kind’ hydrogen plant in Gladstone
A program that kicked off two years ago, has reached a critical milestone with mining giant Rio Tinto (ASX: RIO) and major Japanese trading house Sumitomo giving the go-ahead for the development of a unique hydrogen study in Queensland.
Backed by significant funding support from the Australian government, Rio and Sumitomo have given the green light for construction of the “first-of-a-kind” hydrogen plant in Gladstone.
The new pilot plant is a key component of a $111.1 million program under which Rio Tinto is investigating the potential to partially decarbonise its global alumina refining operations by substituting natural gas with renewable hydrogen.
ARENA provides major backing
The new study was first recognised by the Australian government in 2021 when its renewable energy body ARENA provided $579,786 in funding towards Rio Tinto’s $1.2 million feasibility study.
ARENA (Australian Renewable Energy Agency) has now backed that up two years later by providing a $32.1 million co-funding boost to the proposed Yarwun Hydrogen Calcination Pilot Demonstration Program.
The pilot will look to demonstrate the viability of using hydrogen in the calcination process, where hydrated alumina is heated to temperatures of up to 1,000 degrees Celsius.
Global potential a target
Rio Tinto Aluminium Pacific Operations managing director, Armando Torres, said that if successful, the program could be rolled out globally.
“This pilot plant is an important step in testing whether hydrogen can replace natural gas in Queensland alumina refineries,” he said.
“At Rio Tinto we have put the energy transition at the heart of our business strategy, and this is one of the ways we’re working towards decarbonising our operations.”
The project, which is designed to produce the equivalent of about 6,000 tonnes of alumina per year while reducing Yarwun’s carbon dioxide emissions by about 3,000 tonnes per year, will include a 2.5MW on-site electrolyser and a retrofit of one of Yarwun’s four calciners so it can operate at times with a hydrogen burner.
Mr Torres said it is estimated that the use of green hydrogen could reduce emissions from the plant by 500,000 tonnes per year, or the equivalent of taking around 109,000 internal combustion engine cars off the road.
Construction will start in 2024, with the hydrogen plant and calciner targeted to commence operation by 2025.
Rio Tinto has committed to achieving net zero emissions by 2050 and has targets to reduce Scope 1 & 2 emissions by 50% by 2030 from 2018 levels.
The alumina refining industry in Australia emits approximately 14.9 Mt of CO2-e per annum, or 3% of Australia’s Greenhouse Gas emissions.
New Sumitomo business
Sumitomo Corporation established a new business organisation entitled the Energy Innovation Initiative (EII) in April 2021 which will carry this Gladstone project.
The Japanese company will own and operate the electrolyser at Yarwun site and supply up to 250 tonnes of hydrogen annually to Rio Tinto directly.
Sumitomo Corporation EII director, Seiji Kitajima, said being able to demonstrate real-world applications of hydrogen in industrial settings is essential to reducing carbon emissions and working toward the company’s vision of achieving carbon neutrality by 2050.
“Sumitomo Corporation is proud to be working on yet another hydrogen project in Australia and contributing to Australia’s own emission reductions goals.”
Sumitomo has a history of involvement in hydrogen projects in the Gladstone Region.
In 2021 it signed a Memorandum of Understanding (MOU) for a Gladstone H2 Ecosystem with Gladstone Ports Corporation (GPC), Gladstone Regional Council (GRC), Australian Gas Networks (AGN) as part of the Australian Gas Infrastructure Group (AGIG) and CQUniversity Australia (CQU).
The group joined forces to explore opportunities to develop a hydrogen ecosystem in Gladstone. The ecosystem was targeted to initially pursue domestic offtake and mobility solutions before moving to enable large-scale export.