Can maritime hydrogen overcome the headwinds?

Maritime shipping is both vital to the global economy, facilitating 80% of trade and enabling trillions of dollars in annual economic activity and responsible for more than 700 million tonnes (Mt) of carbon dioxide (CO₂) a year. Alternative energy sources—such as hydrogen—are gaining notice and the International Maritime Organization (IMO) has committed to achieving net-zero by 2050. However, widespread adoption requires overcoming substantial economic, technological, and operational barriers—and a poorly-planned scaleup of maritime hydrogen could risk undermining net-zero goals in the long run, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).

“The maritime sector stands at a pivotal moment as the urgency to combat climate change grows,” said Abhishek Sinha, IEEFA energy finance analyst and co-author of the report. “As various low-carbon approaches continue to emerge and develop, it is important to remember that the industry’s path is neither inevitable nor pre-determined; economics, technology, and policy all will continue to inform the maritime sector’s energy transition.”

The report evaluates the promises of green hydrogen-based maritime fuels, and the signs of preliminary market interest from industry players. It also identifies several hurdles that will need to be addressed if maritime hydrogen is to have a chance of living up to its promises, including:

• High Costs: The economic feasibility of green hydrogen depends on reducing production costs and increasing infrastructure investments, while cheaper, higher-carbon forms of hydrogen risk undermining decarbonization goals.
• Infrastructure Needs: A green shipping sector requires substantial investment in vessels, fueling systems, and port infrastructure.
• Policy and Guidance Gaps: Robust regulatory frameworks are needed to incentivize adoption, avoid carbon lock-in, and ensure the transition is truly sustainable. There is immense peril in a poorly-managed scaleup. Not all hydrogen is created equal, and a large-scale buildout of dirty hydrogen capacity risks undermining the sector’s decarbonization goals.

Collaboration among regulators, industry stakeholders, and market actors is essential to navigate these risks effectively.

Cover photo: IEEFA