Countries in the Asia-Pacific and Africa regions have great potential in the emerging hydrogen economy. However, along with opportunities, there are also challenges when it comes to scaling up the production and distribution of these greener fuels. Many countries in these regions are already developing national hydrogen strategies for domestic industries and export markets, increasing the potential for more energy-producing countries in the future.
Africa is widely seen as a potential global leader in green hydrogen production, not only for itself but also for other regions such as the Asia-Pacific, which is poised to become a major demand center for Africa’s green hydrogen potential. The ambitious net zero targets that the maritime sector has committed to could play an important role in driving investment in the green hydrogen supply chain between the two regions.
To reap the benefits, the industry must find creative ways to tackle various obstacles. Although the Asia-Pacific region is the largest hydrogen consumer in the world, less than 1% of hydrogen is green. The main challenge is the high price of green hydrogen, which costs at least six times more than gray hydrogen, and the lack of mechanisms to close the cost gap of green hydrogen-derived fuels, such as e-ammonia, e-methane and e-fuel. to bridge. -methanol.
Regardless of the growth opportunities within the maritime industry, financing hydrogen infrastructure will not be easy. Building from the ground up is a costly undertaking. Due to limited demand and significant cost differences compared to conventional fossil fuels, few are willing to lead the way.
As demand for green energy grows and hydrogen markets continue to develop, there is increasing scope for willing countries to discuss untapped market opportunities for hydrogen-derived fuels for the shipping sector.
This was the focus of the second Maritime Fuel Supply Dialogues earlier this year – a roundtable hosted by Lloyd’s Register’s maritime decarbonisation hub – which shone a light on the investments needed to support the development of hydrogen-based fuels to fuel the decarbonisation of to support shipping.
The hub is a joint initiative between Lloyd’s Register and Lloyd’s Register Foundation, aiming to accelerate the safe and sustainable decarbonisation of the maritime industry. This second roundtable brought together ministries, fuel developers, the shipping industry and climate and development financiers active in the Africa and Asia-Pacific region.
During the three-day Global African Hydrogen Summit in Windhoek, Namibia, participants shared perspectives on the opportunities presented by clean fuels and highlighted key investment barriers and means to overcome obstacles through regional cooperation.
A more cohesive effort is needed that brings together the intersections of supply and demand to build a compelling case for investment in alternative fuels.
While some countries in the region have been active in discussions about decarbonizing the economy, a more coherent effort is needed that brings together the intersections of supply and demand to build a compelling case for investment in alternative fuels , which could be successful within a regional context.
Countries can also reap development benefits by building a robust regional fuel supply chain. With these economic measures, policymakers must take into account risks and the broader human, social and biodiversity impacts, so that these unidentified market opportunities do not come at the expense of a just and equitable transition.
Working with key maritime, transportation and energy stakeholders in these countries could be mutually beneficial in understanding the broader risks and opportunities. Establishing the large-scale infrastructure required for fuel production and distribution can also be repurposed to unlock and accelerate rollout. of other energy sources throughout the territory, such as electricity.
The International Maritime Organization (IMO) has set a target for 5% of the international shipping fleet to run on scalable zero-emission fuels by 2030, and aims for 10% of ships to run on scalable zero-emission fuels by 2030, enabling green shipping corridors are positioned as a crucial maritime mechanism for decarbonising the economy.
There are currently more than 40 green shipping corridors established worldwide, several of which operate in the Asia-Pacific region, including the Silk Alliance green corridor cluster. These green shipping corridors are now at an inflection point, where stakeholders are moving from the concept phase to implementation and execution.
But one of the critical issues facing maritime stakeholders is securing an adequate supply of green hydrogen-derived fuels through infrastructure investments. For this reason, the Maritime Fuel Supply Dialogues aims to connect national hydrogen strategies in Asia-Pacific and Africa with shipping’s emerging demand for hydrogen-based fuels. This would help focus infrastructure and policymakers’ interest and planning on decarbonizing the maritime sector, building stronger business cases to overcome the problem of investor inertia.
Demand for hydrogen and other green energies will only increase as policies catch up.
The dialogues will build on these discussions with regional stakeholders through different areas of action. This includes working to link supply and demand, presenting stronger justification for flexible fiscal policies in fuel-producing countries, and encouraging port and maritime hub locations to facilitate domestic, cross-sector demand aggregation.
The Dialogues will aim to hold their next roundtable to bring together stakeholders in the regions of Africa and the Asia-Pacific region to promote solutions around the discussion points and explore other mechanisms to support regional developments.
Demand for hydrogen and other green energies will only increase and as policies catch up, scaling will become the biggest challenge facing key stakeholders. This is why regional dialogues between major, established ports should continue to be promoted, while involving experts from sectors outside the maritime sector: namely energy and transport.
“Unlocking Green Hydrogen Fuel Supply Chains” was originally created and published by Ship Technology, a brand owned by GlobalData.
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