ICS report points to need for significantly more hydrogen carriers

Image: ICS

Hydrogen is widely seen as a key element of global decarbonisation ambitions, and a large fleet of specialist hydrogen ships will be needed to meet projected global demand. To meet the global increase of 30 million tonnes of hydrogen sold worldwide, 411 new hydrogen ships (for long-haul transport) would be needed, or up to 500 ships if the hydrogen were transported as ammonia.

That’s one of the conclusions of a new report from the International Chamber of Shipping (ICS). The report, titled “Turning Hydrogen Demand into Reality: Which Sectors Are First?”, focuses on the potential of clean hydrogen as an energy carrier and feedstock for decarbonizing a range of sectors, especially those that are hard to curtail.

With designs for hydrogen-carrying vessels already in place, shipowners are clearly preparing to serve the market. How big it will be depends on how demand develops.

The report shows that to meet future hydrogen demand, the scale of demand for renewable electricity to produce green hydrogen is unprecedented and presents once-in-a-generation opportunities and challenges.

The report, which was produced in cooperation between ICS and Professor Stefan Ulreich, Professor of Energy Economics at the University of Applied Sciences in Biberach, Germany, aims to better assess the future supply and demand dynamics for new zero-emission fuels to be used in the coming decades by various industrial sectors, including maritime transport.

“For global hydrogen demand to keep a net-zero emissions scenario by 2050 within reach, demand for hydrogen fuel sources would need to increase fivefold from current levels to around 500 million tonnes between 2030 and 2050,” says Guy Platten, Secretary General of the International Chamber of Shipping. “One of the key findings of this report is the wide variability of potential demand. Industry will dominate hydrogen demand. However, shipping can play a key role as an enabler of the hydrogen economy.”

The report highlights three economies as the main markets that will initially drive hydrogen demand – South Korea, Japan and the EU. Europe has a target of 20 million tonnes of hydrogen per year by 2030, with half of this volume coming from imported sources. To meet expected EU demand, the fleet will need to grow by 300 vessels to meet the EU’s 2030 target.

According to the International Energy Agency (IEA), hydrogen use is expected to remain static and within current industrial use cases until 2030. However, to grow beyond current hydrogen demand in existing sectors, issues of infrastructure, enabling regulations and energy access barriers need to be addressed so that new sectors can begin using hydrogen, the report states.

“Regulatory certainty is key and governments are key to unlocking opportunities for early adopters by prioritizing demand incentives over supply support to accelerate offtake agreements. One thing is for sure, port readiness and infrastructure development to remove barriers to offtake will be critical. This will allow both the offshore and other sectors to thrive, enhancing energy security and diversification. This is a once-in-a-generation opportunity to transform the entire energy and offshore value chain.”

“The key to realizing the future hydrogen economy is the production infrastructure, but also the transport infrastructure,” said Professor Ulreich. “The maritime industry will play a key role, connecting regions of hydrogen surplus with areas of high consumption. However, this requires port infrastructure for loading/unloading and pipeline transport from port to consumers. Coordinated action would help most to achieve this goal.”

How many hydrogen carriers does all this translate into?

“We see that the annual demand for hydrogen would mean an increase in the hydrogen transport fleet by ship,” says Professor Ulreich. “To meet the global growth, if 30 million tons of hydrogen were traded worldwide, we could need up to 411 new hydrogen transport ships (long distances) or up to 500 ships if it were transported as ammonia.”