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The new coal-to-hydrogen scheme is the latest grand plan seeking alternative uses for the brown coal which has powered the Victorian economy for decades but is much maligned in an era when slashing emissions is government policy.

State and federal governments, both Labor and Coalition, have repeatedly backed projects in the hope they might revive the Latrobe Valley.

Not one of the slew of supported projects has succeeded.

The Advanced Lignite Demonstration program was established in August 2012 to develop "pre-commercial brown coal upgrading technologies to provide low emission energy products from Victoria's coal reserves’’.

Government payments were not made to the Coal Energy Australia project, which failed to pass milestones necessary for up to $30 million in public funding.

Coal Energy Australia had also signed a sales contract for a site that includes the now defunct Morwell Power Station and briquette factory.

In its most recent filed financial accounts, Coal Energy Australia’s auditors warned of "significant doubt" the coal company could continue as a "going concern" due to its weak financial position.

It had lost $8.1 million in 2015/16 with its liabilities well in excess of its assets. One of its bank accounts had a balance of $5.

Since 2015, two other projects connected to the ALDP have collapsed, including a project to turn brown coal into synthetic crude oil and higher grade steel-making coal and another project to convert coal to briquettes.

Environment Victoria has long argued against continued government investment in "clean coal".

"The failure of the Advanced Lignite Demonstration Program to produce even one viable brown coal project should be a signal that it is time to move beyond this polluting and outdated resource," said campaign director, Nicholas Aberle.

"This project not going ahead will save Victoria 2.2 million tonnes of climate pollution and free up $30 million of public funding to spend on projects that are actually capable of creating sustainable jobs in the Latrobe Valley."

While investing $50 million in the latest, Japanese-backed hydrogen scheme, the Andrews government has been only lukewarm in its public support.

On Wednesday Mr Pallas left it to the governernment's earth resources director John Krbaleski to explain: “The Victorian Government continues to support innovation in developing brown coal projects with low carbon emissions as demonstrated by the hydrogen production trial announced last week.”

“The department will work with businesses to support low emission coal projects that can deliver jobs and economic development in the Latrobe Valley.”

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