Lack of policy support to limit green hydrogen supply to shipping - report

The shipping industry must switch from fossil-based fuels to renewable alternatives to meet its decarbonisation targets, but the adoption of green hydrogen has been hindered by a lack of policy support for production, according to a report released by the SASHA Coalition.

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Green hydrogen, which is produced by splitting water molecules using renewable electricity, will be the key to decarbonising heavily polluting industries like shipping and aviation, SASHA's report finds. Green hydrogen is being tested as a fuel in its pure form and it can also be an essential feedstock to produce derivatives like green ammonia and e-methanol, which have been attracting investments from shipowners.

Despite increased interest in green hydrogen, there is still not a pipeline of sufficient green hydrogen being produced, SASHA says. The International Energy Agency (EIA) estimates that around 70 million mt/year of green hydrogen needs to be produced by 2030 to have a chance at reaching future net zero goals. But the combined production from announced projects is only set to amount to 30 million mt/year, according to a Financial Times analysis.

Policy gaps are hindering uptake of green hydrogen, SASHA says. In the UK, there are no hard targets at all for shipping decarbonisation. Current EU policies, meanwhile, are agnostic about the source of hydrogen and do little to support investments in green hydrogen, the group says.

The availability of green hydrogen to fuel ships has also come under pressure from competing demand from other sectors like road transport and domestic heating. While these sectors have viable alternatives to green hydrogen - like batteries and electricity - shipping does not, SASHA says.

“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,” says Aoife O’Leary, director of the SASHA Coalition.

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

By Debarati Bhattacharjee

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