Exclusive: funding requests, uncertain responsibilities and a failure to secure long-term contracts has critics asking if the fossil fuel-based venture is still a good deal

A multi-billion dollar Japanese plan to extract hydrogen from Victoria’s brown coal is at risk of failing due to demands for extra subsidies and a lack of willingness from Japanese customers to sign up for long-term deals.

People familiar with the Hydrogen Energy Supply Chain project said only a portion of the ¥220bn (A$2.48bn) funding will actually be spent on developing a liquefaction plant in the Latrobe valley and export facilities at the nearby Hastings port.