Alternative Fuels Part 1: Hydrogen’s costly affair

Hydrogen is one of the most promising fuels of the future, but is it really going to power the global shipping fleet? Shipping decarbonisation experts Tristan Smith and Christos Chryssakis are both skeptical.

As we introduce the Alternative Fuels series to explore various low- and zero-emission fuels, we start with green hydrogen, which has gained the most attention and been dubbed the “fuel of the future.”

Green hydrogen can have zero carbon emissions as it is produced through electrolysis of water using renewable energy sources like wind, solar and hydropower. But there are also a whole range of other colours in the hydrogen kaleidoscope, which are coded after the source of energy used to make it:

1. Black and brown hydrogen is produced from fossil fuels or coal (high-emission)
   
2. Grey hydrogen is made through steam methane reforming of natural gas without capturing the greenhouse gases (high-emission)
   
3. Blue hydrogen is produced like grey, but with carbon capture and storage (low-emission)
   
4. Turquoise hydrogenis produced by decomposing methane using heat, with solid carbon as a by-product (low-emission)
   
5. Green hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity (zero-emission)
   
6. Pink (or purple and red) hydrogen is generated through the electrolysis of water powered by nuclear energy (zero-emission)
7. Gold hydrogen is a novel concept where carbon-neutral hydrogen is produced from depleted oil reservoirs using subsurface microbes (zero-emission)
   

Two leading industry experts, Tristan Smith and Christos Chryssakis, agree that although hydrogen may be one of the most promising fuels with zero-emission potential out there, hydrogen itself is not a silver bullet for the maritime sector.

Tristan Smith is an associate professor in energy and transport at the University College London (UCL) Energy Institute. He is also a co-founder of University Maritime Advisory Services (UMAS), a research collaboration and advisory project run by the University College of London. Smith has co-penned several influential publications on maritime applications of alternative fuels and is one of the most prominent experts in this field.

Smith and his research colleagues have found that while green hydrogen can be a key feedstock for producing other bunker fuels like ammonia and methanol, they “do not find it is competitive to use as a bunker fuel itself due to the very high costs of its storage – both energy costs to liquefy and the costs of the storage vessels given the low temperature of liquid hydrogen.”

Christos Chryssakis, business development manager at DNV, is another leading alternative fuel experts. Several of his publications on alternative fuels modelling, uptake projections and guidance are used as handbooks by leading shipping companies.

“Everything about hydrogen is costly,” Chryssakis says. “The cost of production is not so much a barrier, but using it onboard is very costly. Retrofitting bigger vessels to accommodate hydrogen is very difficult and very costly. Fuel cells are extremely costly. Storage in large volumes can be tricky and again, costly. Hydrogen may be better for smaller ships, but definitely not ideal for bigger ones."

Chryssakis estimates that pure green hydrogen will remain expensive as a bunker fuel compared to hydrogen derivatives and other green marine fuels, given the high cost of electrolysers, fuel tanks and fuel cells.

Green vs grey

After Russia’s invasion of Ukraine from February sent gas prices through the roof, green hydrogen is now almost competitive on price with grey hydrogen, hydrogen analyst Harry Morgan at Rethink Energy has found. He compares grey hydrogen produced with steam reforming of 44 kWh of natural gas with green hydrogen produced with renewable energy.  

Grey still comes out cheaper at $3,300/mt, but green is not too far off at $3,700/mt.  

Morgan argues that green hydrogen production costs will come off sharply this decade as a result of a significant ramp-up in renewable energy generation capacity, and lower electrolyser unit costs through economies of scale and technological innovations.  

Green hydrogen at a price of $1,500/mt could be within range by 2030, he says. 

Hydrogen’s storage conundrum

Hydrogen bottleneck is probably not its production or its use, but rather its storage, which has even been dubbed a showstopper in the past. Hydrogen is one of the lightest of all elements with low volumetric energy density. Being lighter than helium and 11 times lighter than the air we breathe, the gas is easily lost into the atmosphere if not stored right.

To deal with this low volumetric energy content at atmospheric conditions several technologies exist to compress hydrogen and make its storage more efficient. Hydrogen as a bunker fuel can currently be stored either as a gas or as a liquid.

MAN Energy Solutions’ development engineer Sebastian Rösler has been part of a project to develop a hydrogen-fuelled four-stroke combustion engine for ships. According to him, one of the key challenges is that “compared to other sources of energy, hydrogen’s density is very low. This means that you need big tanks to provide a steady supply for the engine. Additionally, hydrogen must be stored at either high pressure or very low temperatures.”

High-pressure tanks of 350-700 bar are typically required to store compressed hydrogen gas. And this results in higher capital and operating costs.

The biggest concern about storing hydrogen in high-pressure tanks is the amount of space required. In order to achieve fuel injection pressure comparable to heavy oil or diesel, hydrogen must be highly compressed. The greater the compression, the less space is required on the ship. However, compressing hydrogen is also an energy-intensive process that increases the overall cost.

An alternative to compression is storing hydrogen in a liquid form, which in practice is a more complex and expensive method. Liquid hydrogen storage requires cryogenic temperatures to prevent it from boiling back into a gas, which occurs at −252.8°C.

These ultra-chilled temperatures can present a major challenge to the bunkering process because liquid hydrogen evaporates if it reaches a higher temperature after fuelling. In order for the heat flux into the tank to be kept as low as possible, tank materials must be fitted with specific insulation materials, which are very cost-intensive.

There are currently only a handful of concepts designed around using liquified hydrogen as a fuel on ships. Demonstrations have already been made with hydrogen fuel cells and hydrogen-adapted internal combustion engines (ICEs).

“There's a long way to go for fuel cells to become competitive with ICEs, at least 15 years or so," Chryssakis says. This is because, he argues, fuel cells are "very expensive" and need to be replaced often because their performance degrades over time.

PHOTO: C-Job Naval Architects and LH2 Europe are developing a liquid hydrogen tanker. C-Job Naval Architects

Meanwhile, several hydrogen engine, fuel cell and storage technologies for ships are currently under development around the world.

Netherlands-based C-Job Naval Architects has also designed a new class of liquid hydrogen tankers. It will be powered by fuel cells and carry a total of 37,500-cbm or about 2,600 mt of hydrogen.

German ship engine maker MAN Energy Solutions is developing a 100% hydrogen-fuelled internal combustion four-stroke engine by the end of this decade.

South Korean shipbuilding major Samsung Heavy Industries recently received DNV approval for a liquid hydrogen fuel cell concept that uses the electric power generated by liquid hydrogen and polymer electrolyte fuel cells to propel a vessel.

While Smith and Chryssakis bet against green hydrogen as a bunker fuel, they maintain a positive view of hydrogen as a feedstock for hydrogen derivatives like ammonia and methanol.

"Although costly to use as a fuel by itself, green hydrogen is going to be a very important element for production of other green fuels like ammonia or synthetic fuels. So it’s absolutely necessary to produce green hydrogen in significant volumes," Chryssakis says.

Production and transportation of ammonia has been developed for over a century now, and shipping of ammonia as cargo on tankers has advanced significantly.

"Green ammonia is consistently coming out both in our study and those of others as the lowest cost," Smith says. Ammonia will become more attractive to shipowners as the technological readiness of ammonia engines is about to mature rapidly towards the middle of the decade, and if production can be scaled to meet rising demand.

Methanol is one of the most produced and shipped chemicals in the world and since it is liquid at ambient temperatures, few changes required to existing bunkering infrastructure.

Green hydrogen production needs to be scaled up dramatically to meet demand from shipping and other sectors. According to a net zero emissions scenario modelled by the International Energy Agency, shipping will consume almost 2% hydrogen and almost 8% of ammonia by 2030.

Smith says that “Whilst more sectors than just shipping will need these energy commodities, we are well on our way to scaling up production.”

Production-side developments around the world may confirm his prediction.

Oman aims to produce up to 1 million mt/year of green hydrogen by 2030. The Dutch Port of Rotterdam aims to supply northwest Europe with 4.6 million mt/year of green hydrogen by 2030 through imports and domestic production. The EU intends to produce 10 million mt/year of green hydrogen itself by 2030, and import another 10 million mt/year, under its REPowerEU plan.

Chile aims to have 5 GW of electrolysis capacity under development by 2025 and to create the cheapest green hydrogen on the planet by 2030. Chile's energy minister Diego Pardow stresses that his country's abundance of renewable energy will be used to produce fuel for the maritime sector in the future.

Other countries like India, Panama and Namibia have also expressed intent to become green hydrogen hubs for the maritime sector. Danish shipping giant A.P. Moller - Maersk will work with Egyptian authorities to conduct a feasibility study on green hydrogen-based marine fuel production in Egypt by the end of the year.

By Konica Bhatt

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