5.4 The potential role of hydrogen in Arctic maritime transport
5.4.1 Potential for adopting hydrogen as a marine fuel
In 2023, the European Maritime Safety Agency (EMSA) examined the potential for adopting hydrogen as a marine fuel by studying hydrogen production capacity, the status of regulations, fuel storage options, supply and power generation technologies, techno-economic analyses and risk-based case studies. Although this study does not solely focus on the Arctic region, its approach and concluding remarks are relevant for vessels operating in the Arctic. Some of the findings are highlighted below:
The global production of green hydrogen is less than 0.1 million tonnes annually. The global energy demand of international shipping is estimated to be equivalent to approximately 95 million tonnes of hydrogen per year. In 2017, 581 000 tonnes of oil equivalents were consumed in the Arctic Polar Code area, which is equivalent to 193 667 tonnes of hydrogen. Therefore, assuming there is no demand for green hydrogen from shipping elsewhere or from other sectors (e.g. road transport), global green hydrogen production would still fall short of the energy needs of vessels operating in the Arctic.
While there are few costal vessels that currently use hydrogen, it is regarded as a promising fuel option for future short-sea shipping. Despite this, hydrogen storage is seen as an obstacle because compressed hydrogen has low storage density and liquid hydrogen requires specialised tanks. Liquid organic hydrogen carriers and ammonia appear to be more suitable for deep-sea shipping. However, further development is required for onboard installation for marine applications.
For long-distance shipping, the total cost of ownership (TCO) for hydrogen-fuelled vessels remains a barrier. Case studies estimate that the TCO for green hydrogen will be approximately three times and 20–50% higher than conventional fuels in 2030 and 2050, respectively. For blue hydrogen, the TCO in 2030 is approximately twice as high, though it may reach cost parity in 2050.
There is experience from other industries regarding the production, use and handling of hydrogen. However, regulations governing hydrogen as a marine fuel are still under development. In the meantime, established methods for approving H2-fuelled ship designs utilise a risk-based ‘alternative design’ approval process.
Regarding risk and safety, the EMSA refers to major concerns about hydrogen as a marine fuel with respect to hydrogen flammability range, leakage and flame speed, as well as detonation and deflagration issues. These require further detailed studies to better understand the risks and implement additional safeguards.
5.4.2 Sustainable zero-carbon fuels for shipping
In 2022 and as part of the Nordic Roadmap – Future Fuels for Shipping project, sustainable zero-carbon fuels for shipping were screened. The focus of the study was on Nordic shipping, which could cover parts of the Arctic. The study showed that hydrogen, ammonia and methanol stand out among other fuels on the pathway to the decarbonisation of Nordic shipping:
Hydrogen has the potential for use in vessels operating on shorter, regular routes. In the short term, green hydrogen offers a highly scalable production opportunity, which has the potential to match the growing demand, even in smaller ports. Onshore production technology is relatively mature, with costs projected to be competitive compared with other low-carbon alternatives. However, the limited maturity of onboard technology and safety measures remains a barrier, affecting risk assessments and capital costs for shipowners.
Ammonia has a higher volumetric energy than hydrogen, which makes it favourable for covering a large part of energy demand for Nordic shipping. However, converters have insufficient technical maturity. New ammonia engines are not particularly compatible with existing vessels, which necessitates major retrofits and/or new-builds, adding to capital costs. In addition, regulations on the use of ammonia as a marine fuel require further development. Since ammonia production is dependent on a supply of hydrogen, there is a need for coordination on the supply and demand of both fuels.
Methanol is used as fuel for methanol tankers, which has so far limited the demand for bunkering facilities. Methanol has the potential to meet a significant portion of the energy demand for Nordic shipping. It is highly compatible with existing vessels, which reduces the cost of retrofits and new-builds. The development of commercially scalable renewable CO2 production is essential to enable the production of green e-methanol.
Although hydrogen, ammonia and methanol are considered the most promising options, methane, hydrotreated vegetable oil (HVO) and battery-electric systems will also play an important role in Nordic shipping.
5.4.3 Alternative fuels and technologies for potential use in Arctic vessels
In 2019, on behalf of Protection of the Arctic Marine Environment (PAME), DNV assessed alternative fuels and technologies for potential use in Arctic vessels. The analysis covered hydrogen and hydrogen-based fuels, such as methanol and ammonia. To compare the alternatives, three criteria were considered: environmental, economic and scalability. The environmental criterion covers air emissions and the risk of bunker spills. The economic criterion covers capital and operating costs. The scalability criterion covers (i) technical scalability (e.g. safety and maturity); (ii) applicability scalability (e.g. power and energy limits; compatibility with existing infrastructure); and (iii) availability scalability (e.g. available infrastructure and security of supply). The main results are as follows:
While alternative fuels showed better environmental performance compared with traditional fuels, they generally scored worse on economic and scalability criteria.
LNG with a battery-electric hybrid solution gave the best results for short- and deep-sea shipping. For short-sea shipping, biogas and battery-electric propulsion were the leading alternatives. For deep-sea shipping, biodiesel (HVO) and methanol were the top contenders. Applicability and scalability were the factors that mainly differentiated the scores for short-sea and deep-sea shipping.
The adoption of all alternative fuels had some barriers. In the Arctic, these barriers are likely to be exacerbated due to the remoteness, as well as challenging ice and weather conditions. The main barriers are the costs associated with machinery, fuel prices, availability of bunkering infrastructure, long-term fuel availability, onboard fuel storage space and safety concerns.
Finding volume-efficient ways for storing hydrogen onboard is a challenge. Regulations on the use of hydrogen and fuel cells onboard are under development. Fuel availability and the lack of bunkering facilities impose additional challenges.
Methanol can be produced from various feedstocks, such as hydrogen, and it is available in certain ports, such as in Sweden. The life cycle emissions of methanol from renewable sources are considerably lower than methanol from natural gas. The environmental impacts of a potential methanol spill are expected to be much lower than an oil spill of the same magnitude. On the other hand, methanol is more expensive than distillate marine fuels and the fuel tanks are typically twice the volume of oil tanks for the equivalent energy content.
Safety and regulatory challenges coupled with space/weight considerations related to storing large quantities of hydrogen have generated interest in ammonia as a hydrogen-based fuel. The volumetric energy density of ammonia is more than 50% greater than that of liquid hydrogen. This makes ammonia a viable option for transporting large amounts of energy over long distances from remote renewable sources. There are significant cost saving projections associated with storing hydrogen as ammonia. There is an existing infrastructure for the transport and handling of ammonia, since it is already utilised as fertiliser. However, the development of an infrastructure for its use as a fuel is a barrier. In addition, ammonia is highly toxic, which imposes a disadvantage.
5.4.4 Environmental impacts
In 2023, as part of the Nordic Roadmap – Future Fuels for Shipping project, the impact on the climate and environment of potential zero-carbon marine fuels was assessed using a life cycle assessment method. The project studied potential fuels, such as hydrogen, ammonia and methanol, along with propulsion systems (e.g. engines and fuel cells). The study primarily examined greenhouse gas emissions, while also addressing other environmental impacts. Some of the findings are as follows (see report for more details and findings):
Biomass-based methanol and battery electric options exhibit the lowest climate impact, followed closely by various green hydrogen alternatives and green ammonia in fuel cells.
Battery electric systems have the lowest acidification potential, followed by biomass-based methanol in solid oxide fuel cells (SOFC), hydrogen in proton-exchange membrane fuel cells (PEMFC) and ammonia in SOFC.
Biomass-based methanol in SOFC, compressed natural gas, battery electric systems and liquefied hydrogen in PEMFC produce the lowest levels of particulate matter, followed by natural gas-based ammonia in SOFC.
Further studies are needed to better understand the climate impact of ammonia and hydrogen pathways in marine operations.
5.4.5 Infrastructure
Shipping in the Arctic requires reliable and resilient infrastructure for bunkering, navigational aids and rescue systems etc. Although some port construction projects are underway, ports and infrastructure along Arctic shipping routes are scarce and of low quality. In addition, there is a lack of professional know-how in building, maintaining and operating these facilities. Ports require major investments, which could further increase the costs of Arctic shipping. As mentioned, with a changing climate and increasingly wavier conditions expected, coastal infrastructure may also face heightened risks from coastal erosion.
Energy security is a critical challenge in the Arctic. Low population density has led to scattered settlements, which are often remote and not connected by roads. This remoteness, combined with long distances between settlements, increases the complexity and cost of infrastructure projects from planning through to the maintenance stage. In temperate areas, electricity lines follow the roadways. In the absence of roads, many settlements use isolated islanded electricity grids, which makes them more vulnerable to disruptions. Most settlements use diesel as their primary energy source, and the transport of diesel using barges, ice roads or planes comes with considerable risk, uncertainty and cost.
Wind and photovoltaic (PV) power offer huge potential in the region. Wind is a widespread energy source with a high potential in coastal areas. Wind energy projects are scalable to the required output, which is an advantage. There are numerous wind turbines installed in the Arctic, such as the Raggovidda wind farm in Finnmark, Norway. Solar power contributes to less than 1% of the total electricity generated in the Arctic. The summer daylight in the Arctic makes PV an interesting energy source for some remote applications. Both sources of energy are untapped in the Arctic and can be used to produce hydrogen, ammonia and methanol to fuel shipping and other local users. Section 3.3 provides an overview of relevant projects focusing on the use of hydrogen and hydrogen-based fuels for Arctic shipping.