A project to create liquefied hydrogen from Australian brown coal and ship it to Japan has marked the start of the process at two facilities in the southeastern state of Victoria.

The Hydrogen Energy Supply Chain, a partnership between the two countries and undertaken by a consortium of Australian and Japanese companies, is a 500 million Australian dollar (¥42.3 billion) pilot project working to develop a complete hydrogen supply chain.

Representatives of the governments and companies involved attended a ribbon-cutting ceremony in the Latrobe Valley in Victoria on Friday.