New report urges investment in hydrogen fuel for shipping


United Kingdom – A recent analysis from the Tyndall Centre at the University of Manchester highlights the critical role the maritime industry will play in transporting the green fuels necessary to achieve global climate objectives.

However, it found a significant gap between what is needed and publicly proclaimed government-led projects, calling for the creation of a much more robust national strategy on low-carbon fuels.

According to the authors of Shipping’s Role in the Global Energy Transition, increasing low-carbon hydrogen and sustainable bioenergy is essential for reaching the goals of the Paris Climate Agreement. However, they found that the absence of enabling government policies, such as those that guarantee producers’ and consumers’ access to markets and fair prices, was discouraging investment in the transportation infrastructure necessary to support the global transformation of the energy system.

According to the International Energy Authority, the world will need between 50 and 150 million tonnes of low-carbon hydrogen by 2030, but only 24 million tonnes will be produced by projects that have already been announced. It is concerning that only 4% of these initiatives have secured a final investment decision. Tyndall Centre researchers believe that in order to provide users, shippers, and producers of low-carbon hydrogen with the security they need to make investments, more government regulations are required.

Global energy transition

Transporting bioenergy and hydrogen that has been converted into ammonia, as per the research, will play a crucial role in the global energy transition. It came to the conclusion that ammonia and bioenergy exports in the ensuing decades might compete with those of gas and coal at the moment. However, it would need around 20 enormous new ammonia carriers to transport green hydrogen from producers to consumers per year.

Given the 2-3-year timeline for building new boats, representatives from the shipping industry indicated that they needed assurance on hydrogen generation as soon as possible in order to be able to support the necessary investments in new infrastructure. In order to ease concerns that any new ships built to transport low-carbon fuels may never be used, the International Chamber of Shipping, which commissioned the report and praised it, encouraged governments participating at COP27 to “send stronger market signals” to the shipping industry.

The Tyndall Centre’s investigation revealed a number of potential elements that could be taken into account in order to increase the effectiveness of government initiatives at attracting investment. For instance, regulations mandating increasing proportions of green hydrogen, the creation of “production credits” for hydrogen production, or the establishment of markets and pricing that are fair to both producers and consumers are some of these. In the United States, Germany, and India, these strategies have previously been tested.