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Blend Tiger research explores hydrogen as the shipping industry’s new bunker fuel

07 Mar 2023

Eliseo Curcio, Clean Fuels Business Developer, of New York-based blending consulting company Blend Tiger LLC recently shared his paper ‘Hydrogen the new fuel for the shipping industry’ with bunkering publication Manifold Times.

The document provides an overview of hydrogen’s storage as a bunker fuel on vessels, its energy density, forecast while exploring if the product can be an alternative to marine gas oil (MGO) and or Very Low Sulphur Fuel Oil (VLSFO), amongst other topics.

The author drew the following conclusions in the study:

The opportunities for hydrogen to decarbonize the marine industry are significant, but the challenges are great. Increased investment and clear and supportive policies and regulations are necessary. The magnitude of growth needed for hydrogen fuel use is an enormous obstacle. Changes to production, infrastructure, regulations, demand, and even data collection will be required.

Scaling all components of the value chain is a major part of the challenge, but also part of the solution. Economies of scale will help to lower costs and diversified production sources will help lower risk for off-takers and enable competitive markets. Scaling-up production will look different in different regions.

First, new regulations are needed at ground level, e.g., refineries where most of the hydrogen is produced through SMR. New technologies to get cleaner Hydrogen are needed there first, so they can provide the shipping industry with green hydrogen. Afterwards shipowners need to be able to purchase the hydrogen, that means ports and terminals need to have the infrastructure to provide hydrogen to all the ships.

Important considerations need to be taken into account on how hydrogen is moved and stored. If the hydrogen is bunkered and stored as a liquid, new and expensive infrastructures are needed. Shipowners need to invest in refurbishing engines with more expensive technologies, such as fuel cells.  Then the tanks which store the hydrogen need to be rebuilt to tolerate pressurized liquid and all the pipes that transfer Hydrogen need to be insulated to avoid hydrogen leaks.

As mentioned, the big shipping companies can afford the investment but the majority of smaller shipowners around the world cannot comply with this expensive technology. For all those reasons hydrogen can be a serious candidate only if everybody can afford to use it and to buy it. It has to be a fuel for everybody not just for elite shipping companies to show how they are leading decarbonizing the sector.

More investment, research and development are needed to lower production costs and promote ramp up. Given the scale of the investments needed on the supply side, it is likely that some form of long-term supply contracts will be needed. Pricing structure, delivery terms, flexibility, hydrogen quality, review clauses will be crucial parts of the negotiated contracts between buyers and sellers.

The hydrogen market is still in its infancy, but the potential and momentum for market development have never been greater and we believe it has excellent possibilities to replace the current MGO. Because the price, the cost of the technology and the availability, Hydrogen can play a role in the future but not in the present. We need to take advantage of the resources we have now and use them. For example, biofuels are the present solutions to help to decarbonize the sector because they can be used directly in the current technology and it won’t require enormous investments

Note to readers: The full report ‘Hydrogen the new fuel for the shipping industry’ can be downloaded from the Blend Tiger website through this link.


Photo credit: Blend Tiger
Published: 7 March, 2023

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