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SASHA: Green hydrogen is vital for sustainable bunker fuels in shipping and aviation

New report outlines how governments should prioritise the use of hydrogen and DAC in the aviation and shipping sectors because they lack decent alternatives, amongst others.

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All pathways to truly sustainable fuels for the shipping and aviation sectors require green hydrogen, produced from renewables, with some of them requiring carbon dioxide from sustainable sources like direct air capture (DAC).

This was the main conclusion of a report released on Monday (11 September) by the SASHA Coalition, facilitated by Opportunity Green. 

The report revealed that there is a lack of policy supporting the production of green hydrogen, which is slowing down demand and discouraging investment, creating a “Green Hydrogen Gap”. 

It outlined how governments should prioritise the use of hydrogen and DAC in the aviation and shipping sectors because they lack decent alternatives, and also highlights the need for policy to ensure that these solutions can be rolled out at scale. 

While first-mover ambitious companies can step forward voluntarily to send clear, unambiguous and urgent demand signals to green hydrogen producers, their actions will always be in isolation without the backing of policymakers.  

The Green Hydrogen Gap report by Opportunity Green draws on exclusive research by Arup and looks at the policy landscape of green hydrogen and DAC in the UK and the EU. 

It found that hydrogen production is behind on projections of where it needs to be to meet the temperature goals of the Paris Agreement and that this is due to a lack of guaranteed demand across the board. 

The latest environmental policies from both the EU and the UK focus more on supporting biofuels and/or the use of gas (liquefied natural gas) in aviation and shipping respectively, rather than ensuring that green hydrogen – required for full decarbonisation – is prioritised for aviation and shipping.

Aoife O’Leary, CEO of Opportunity Green and Director of the SASHA Coalition, said: “There is a worrying delay in green hydrogen production, which means that if aviation and shipping don’t make their case clearly and loudly now, they won’t have access to fuels that will truly lead to sustainable decarbonisation.”

“Governments are already prioritising other industries for hydrogen, so without stronger policy, aviation and shipping will be overlooked.”

Kerosene and Heavy Fuel Oil currently meet the bulk of fuel demand for the marine and aviation industries, and it’s estimated that the total consumption of marine fuels account for around 5% of global oil demand.

Sally Prickett, Director of Hydrogen, CCUS and New Fuels in Arup’s Advisory team, said: “Clearly, shipping and aviation will be unable to decarbonise at the scale and pace required without alternative fuels. It’s unlikely that there will be a ‘one solution fits all’ fuel for these sectors, but one thing this research tells us is that green hydrogen will play a critical role in their decarbonisation as a feedstock for the majority of sustainable fuel pathways. Without green hydrogen, these sectors will struggle to find satisfactory zero emissions solutions.” 

According to the report, policy signals are supporting the uptake of hydrogen-derived fuels at both a UK and EU level. However, these are not on the scale that’s needed to meet Paris targets and are just one component that will drive the adoption of hydrogen-derived fuels. 

“Policymakers must recognise that green hydrogen will continue to be in limited supply in the coming decades and should therefore be targeted towards sectors – such as shipping and aviation – that have no more efficient routes to decarbonisation,” it said. 

Nuala Doyle, Policy Officer at the SASHA Coalition, said: “Both shipping and aviation have come under increasing scrutiny for their climate impact, resulting in additional regulation at international, regional and national levels. And regulation will only get stricter over time as the climate crisis worsens.”

“We know that the fuels that will fully decarbonise both sectors require green hydrogen and direct air capture. However, current regulations do little to incentivise these – instead the regulations encourage fuels that either are not scalable or are still fossil fuels. Without regulation that aligns with, and incentivises, the goal of zero emissions, companies may find they end up with stranded assets from investment in a fuel that is no longer acceptable to use.”

Photo credit: SASHA Coalition
Published: 13 September, 2023

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Alternative Fuels

Halifax Port Authority secures funding for green shipping corridor and infrastructure projects

Initiatives include preparing to host and potentially refuel alternative fuel-powered vessels, establishing a hydrogen production facility and electrifying port equipment to reduce emissions.

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Halifax Port Authority secures funding for green shipping corridor and infrastructure projects

Canada’s Minister of Transport and Internal Trade Anita Anand on Wednesday (5 February) said an investment of up to CAD 22.5 million (USD 15.7 million) has been granted to Halifax Port Authority from Transport Canada to prepare the port for future bunker fuels and energy sources.

The investment includes CAD 22.5 million to accelerate development of the Halifax – Hamburg green shipping corridor. 

Initiatives under this segment include preparing to host and potentially refuel alternative fuel-powered vessels, establishing a hydrogen production facility and electrifying port equipment to reduce emissions. 

The remaining CAD 2.5 million will be used for the Ship to Shore Crane Infrastructure project, under the National Trade Corridors fund, to relieve supply chain congestion, expand terminal capacity, and increase speed and efficiency when servicing larger vessels at the Port of Halifax.

“Our ports are essential to global trade and to Canada’s economy. By investing in green shipping corridors, supply chain infrastructure, and clean technologies, we’re taking decisive action to reduce emissions,” Anita Anand said. 

“Together, we’re building a sustainable future for transportation, while supporting jobs and driving economic growth in Nova Scotia and beyond.”

 

Photo credit: Transport Canada
Published: 10 February, 2025

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Alternative Fuels

PowerCell: Hydrogen fuel cells with methanol reformer tech offers solution to net-zero shipping

Fuel cells with methanol reformer tech can convert methanol into hydrogen onboard, producing energy from methanol 30% more efficiently than internal combustion engines, says Dr. Andreas Bodén.

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PowerCell: Hydrogen fuel cells with methanol reformer tech offers solution to net-zero shipping

Dr. Andreas Bodén, Senior Vice President and Chief Technology Officer of fuel cell systems developer PowerCell shares with Manifold Times the potential of hydrogen fuel cells with methanol reformer technology as a solution in maritime industry’s transition towards net-zero-emission: 

 As the maritime industry transitions towards net-zero emissions, renewable fuels have been at the forefront in advancing sustainable shipping. According to Hydrogen Europe’s “Long-term outlook on zero-emission mobility” survey, e-fuels hold the most promise for various ship types, including ferries, cruise ships, and container vessels. 

Among these e-fuel options, methanol reformer technology is emerging as a potential solution in this transition. This technology can convert methanol into hydrogen onboard through steam reforming, enabling proton-exchange membrane (PEM) fuel cells with 30% greater efficiency than internal combustion engines, paving the way for compact, high-power, and net-zero energy solutions without relying on pure hydrogen infrastructure.

Hydrogen, often dubbed the building block of the energy transition, emerges as a viable option for certain vessels with fixed or shorter routes, such as passenger ferries and service vessels. However, its practicality for wider-scale use in deep-sea shipping has significant challenges related to supply of green molecules and energy density, as well as storage, transport, and handling.

Methanol addresses these challenges by serving as an easy and efficient liquid hydrogen carrier. It is easy to handle, store, and transport at ambient temperature and pressure. By serving as a hydrogen carrier, methanol overcomes the logistical obstacles of hydrogen fuel while still enabling the use of high-efficiency fuel cells. This symbiosis positions methanol and fuel cells as key players in scaling renewable fuels for the maritime industry. 

PowerCell: Hydrogen fuel cells with methanol reformer tech offers solution to net-zero shipping

Dr. Andreas Bodén, Senior Vice President and Chief Technology Officer of PowerCell

Efficient use of scarce resources

Green fuels like renewable methanol face significant hurdles, from scaling production to securing offtake agreements. Marine economist Dr. Martin Stopford warns that shipping might lag behind other sectors, such as road transport and chemicals, in accessing renewable fuels. At the same time, the Methanol Institute tracks nearly 90 green methanol projects aiming to produce 9 million tons annually by 2027, some of which will benefit the marine industry.

Despite the level of optimism, renewable methanol will be a scarce and a costly resource for the foreseeable future. Lloyd’s Register estimates its initial cost at around $1,000 per ton, which is significantly higher than conventional fuels. Shipowners must therefore maximise efficiency, reducing the volume of renewable fuel required and mitigating operating expenses.

Methanol’s energy density surpasses hydrogen and ammonia but falls short of hydrocarbon fuels. Lloyd’s Register highlights that ship operators would require two and a half times more methanol than traditional fuel oil for equivalent energy output. This disparity underscores the necessity of adopting more efficient propulsion systems.

Fuel cells: A pathway to efficiency

Fuel cells with methanol reformer technology offer a solution. These systems can convert methanol into hydrogen onboard through steam reforming, producing energy from methanol 30% more efficiently than internal combustion engines. PEM fuel cells which can use this technology stand out for their compact size, efficiency, and high-power density. These technologies enable net-zero energy generation without the need for pure hydrogen infrastructure.

For smaller vessels like ferries and towboats, fuel cells can serve as the primary propulsion system, reducing renewable methanol consumption by up to 30%. Larger ships, such as container vessels, can use fuel cells to power auxiliary engines, eliminating emissions from fossil-fuel generators during port operations. Renewable methanol further curbs nitrogen oxide (NOx) emissions by up to 80%, while eliminating sulphur oxide (SOx) and particulate matter (PM) emissions. These benefits can be enhanced when using an internal combustion engine (ICE) or a fuel cell with reformer technology specifically designed to reduce local pollutants. 

Beyond methanol, fuel cell reformer technology can be developed for ammonia. This adaptability offers a pathway to the efficient use of ammonia as a future zero-carbon solution. This flexibility also allows shipowners to adopt renewable methanol now and transition to other fuels as they become viable.

Balancing sustainability and efficiency

The IMO’s revised GHG strategy targets net-zero emissions for international shipping by 2050, with interim milestones for 2030 and 2040. Achieving these goals requires efficient use of renewable fuels and innovative propulsion systems. PowerCell’s Methanol to Power Solution, M2Power 250, exemplifies the potential to enhance fuel efficiency and reduce operational costs. 

As the maritime industry is responsible for 3% of global GHG emissions, fuel cells with methanol reformers represent a practical solution. Whether powering smaller vessels or auxiliary systems on deep-sea ships, this technology bridges the gap between the current fuel limitations and the future of sustainable shipping. 

The marine industry must embrace innovative solutions to achieve net-zero emissions. Fuel cell technology, with its unparalleled efficiency and fuel optionality, positions many shipowners best to navigate the challenges of the energy transition. 

 

Photo credit: PowerCell
Published: 6 February, 2025

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Alternative Fuels

ENGINE on The Week in Alt Fuels: Trump doctrine could favour blue hydrogen

Trump’s recent executive orders are unlikely to impact existing tax incentives for low- and zero-emission fuel production in the US, but they may redirect focus from green to blue fuels.

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RESIZED Venti Views on Unsplash

Trump’s recent executive orders are unlikely to impact existing tax incentives for low- and zero-emission fuel production in the US, but they may redirect focus from green to blue fuels.

US President Donald Trump recently issued an executive order to pause all unspent federal funding tied to the Inflation Reduction Act (IRA). Federal agencies now have 90 days to report how these funds align with the administration's broader energy goals to the Office of Management and Budget and the National Economic Council.

This order has raised questions about its potential impact on the US low- and zero-emission fuel production sector. But some experts suggest that the move is unlikely to harm the existing tax subsidies for clean fuel production under the IRA.

"All spending on Inflation Reduction Act and IIJA (Bipartisan Infra Law) ordered to be stopped by Trump Executive Order. I assume this applies to unspent discretionary grants and loans like most (all?) of DOE LPO and GDO, but not tax credits,” said Rob Gramlich, president of power-grid consultancy Grid Strategies. He added that stopping mandatory grants would venture into legal complexities under the impoundment law, which requires such funds to be spent unless overridden by the Supreme Court.

IRA tax credits like 45V for green hydrogen and 45Q for carbon capture promote the production of green and blue hydrogen-based fuels in the US by reducing the production cost of these fuels.

These subsidies could benefit several green and blue fuel projects in the US that could produce hydrogen-based fuels for the bunker market. For instance, Methanex and Woodside Energy are developing green methanol and blue ammonia production in Beaumont. HIF Global is building an e-methanol plant in Matagorda County, and LSB Industries has plans for a blue ammonia plant near the Houston Ship Channel.

Removing tax credits will raise low-carbon fuel production costs and contribute to keep price gaps with fossil fuels wide.

But since they are already enacted, removing them would require further congressional action, which could “prompt legal challenges,” according to Robert Moczulewski, senior director at tax advisory firm Baker Tilly.

Gerben Hieminga, senior energy sector economist at ING, believes that “hydrogen and CCS tax credits can survive and continue to play a crucial role in reducing costs” under the Trump administration. In fact, they may even see “loosened eligibility criteria,” which can help to reduce costs, he added.

He also noted that the freeze could impede funding for green hydrogen technologies such as electrolysers, but Trump's focus on natural gas and carbon capture and storage (CCS) might boost blue hydrogen production.

“Blue hydrogen is likely to dominate green hydrogen, allowing the industry to grow more significantly due to the larger scale of blue hydrogen projects,” he said, estimating US blue hydrogen production could reach 4.8 million mt/year by 2030, compared to only 1.2 million mt/year of green hydrogen.

While tax credits may survive Trump's presidency, Hieminga cautions that uncertainties around “tax credit guideline finalisation, non-credit funding, and government-enabled hydrogen development programmes can slow down project development.”

In other news this week, Spanish project developer Reolum plans to build a plant to produce 140,000 mt/year of e-methanol for bunkering and other industries. The plant will be located in the Castilla y León region of northwestern Spain and is expected to become operational by 2027.

Swedish e-fuel company Liquid Wind plans to build another 100,000 mt/year e-methanol production plant in Finland. The fuel produced will primarily be supplied to the maritime and aviation sectors. Commercial operations are expected to begin in 2029.

Global marine fuels supplier Monjasa will start supplying biofuel bunker blends in the Panama Canal area. Monjasa will offer ISCC-certified B30-VLSFO blends in Panama, the company said in a social media post. It expects to supply about 5,000-7,000 mt/month.

By Konica Bhatt

 

Photo credit: Venti Views on Unsplash
Published: 27 January, 2025

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