Green Hydrogen – The Ticket to a Cleaner Future
Green hydrogen is a versatile fuel with several potential applications. It can be used in fuel cells, blended with conventional fuels, or even entirely replace conventional fuels in combustion engines. Among these options, fuel cells offer the greatest efficiency, up to 50-60%, and potentially even higher if heat recovery is employed. Adapted combustion engines, while less efficient than fuel cells, can still achieve efficiencies between 40-50%.
Blending hydrogen with conventional fuels can also improve combustion and reduce GHG emissions. Even a simple 50/50 mix of heavy fuel oil and hydrogen can significantly reduce CO2 emissions, by up to 43% per unit of distance traveled. Storing and transporting pure hydrogen on large ships pose significant challenges, leading to a preference for converting it into alternative carriers.
Hydrogen-derived fuels offer a promising path towards zero-emission or carbon-neutral shipping. Ammonia, for example, can be produced using hydrogen and is a potential future fuel for ships. Other options include electro-fuels like E-LNG (electrolytically produced liquefied natural gas), E-diesel, and E-methanol. All these options share a common thread: they rely on hydrogen as a key building block. This highlights the versatility of hydrogen and its significant role in decarbonizing the maritime sector, even if it’s not always the fuel directly powering the ships.
Charting the course: Targets
In the International Energy Agency’s (IEA) 2050 net-zero scenario, near-complete decarbonization in the shipping sector depends on shifting toward clean fuels.
Ammonia and methanol produced from green hydrogen (“green ammonia” and “green methanol”) hold advantages compared to traditional fuels. For example, green ammonia boasts a well-to-wheel greenhouse gas footprint up to 90% lower than conventional marine fuels, while green methanol offers similar emission reduction.
To reach the target of net zero by 2050, about 59.5 million tons of hydrogen will be annually required for direct use and clean fuel production. Similarly, the International Renewable Energy Agency (IRENA) predicts a comparable scale of hydrogen feedstock, estimating around 60 million tonnes of green H2 annually as a feedstock for shipping fuels by mid-century.
By 2030, marine fuel demand is projected to reach 13EJ according to current policies. To meet the short-term target of a 30-40% reduction by 2030, the proportion of zero-carbon fuels need to rise to 10% (1.3EJ), equivalent to approximately 70 million tons of e-ammonia. This amount is 3.5 times the current global traded volume of ammonia or twice the traded volume of methanol.
According to DNV, the projected share of carbon-neutral fuels, those made using clean H2 and captured CO2, is expected to be less than 7% by 2030.[8] It estimates that these carbon-neutral fuels will have a demand of up to 17 million tons of oil equivalent. So, how much hydrogen as feedstock would we require to meet this demand?
Where are we with our resources?
- Renewable Electricity
According to the IEA estimative, an extra 600TWh of renewable energy would be required to power this hydrogen demand, necessitating 230GW of installed wind and solar capacity. However, as a sought-after commodity by other sectors, scaling up renewable energy must be much faster. With limited time to build the required infrastructure, this could lead to less supply than demand, and higher prices in the short term, resulting in reduced demand and alterations to the plans.
Renewable energy deployment is not a bottleneck for the energy transition. This renewable capacity target is a feasible effort, considering that 2023 alone saw more than 500GW of solar PV and wind capacity deployed.
IEA estimates that 130GW of electrolyzer capacity would be required to produce enough hydrogen for ammonia to make up 10% of maritime fuels by 2030. However, this rises to 150GW for green methanol. This target is in line as there are 175GW of electrolyzer projects planned until 2030, although many of these will have to feed into the demand from other sectors as well.
- Carbon-neutral Fuel Projects
DNV reports over 2,200 active and proposed projects for producing carbon-neutral fuels. However, it remains unclear how many of these projects rely on green hydrogen, biofuels, or carbon capture for clean hydrogen. These projects aim to supply the market with 45 million to 63 million tons of oil equivalent by 2030.
Notably, most of these projects are still in the planning phase and have not reached a final investment decision or started construction. Additionally, many of them are not specifically dedicated to supplying the maritime sector.
- Modification of Container Vessels
Transitioning to clean fuels also necessitates modifications to existing container vessels. Ammonia and methanol, for instance, require adjustments to fuel storage tanks, piping systems, and potentially even engines, to ensure compatibility and safety.
According to Oxford University’s new study, around $2.25 trillion of investment in infrastructure development will be required if 90% of the global shipping fleet were to use green ammonia as its only fuel in 2050.
