Kick-starting a green hydrogen supply chain across Asia and Africa
Asia-Pacific is already experiencing a lot of traction on the topic of hydrogen-based fuels for shipping
THE maritime shipping industry is going through a fuels revolution, and Singapore and the connecting shipping networks across the Indian and Pacific Oceans are right in the middle of it.
As the key bunkering hub in the region, Singapore’s response to the decarbonisation ambition set by the United Nation’s shipping agency, the International Maritime Organization (IMO), will be pivotal to steer the industry and ensure this region remains on track for its green transition to cleaner ships and green fuels.
One year ago, the IMO adopted the 2023 Greenhouse Gas (GHG) Strategy which set an ambitious decarbonisation target of net-zero GHG emissions by, or around, the year 2050 and strict intermediate decarbonisation targets for the years 2030 and 2040. Along with this came a detailed 2030 target for international shipping concerning the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources.
The maritime industry, a major consumer of fossil fuels, is seeking sustainable alternatives to reduce its carbon footprint. Green hydrogen, when used to produce synthetic fuels for deep-sea shipping, offers a promising solution.
However, the industry is short of these hydrogen molecules, so accelerated investment in green hydrogen production and infrastructure will help this region contribute to global decarbonisation efforts while also securing a competitive advantage in the emerging market for sustainable shipping fuels.
The IMO policy signal in place, and market-based mechanisms currently under development, create a cocoon of opportunities for alternative fuel producers globally by stimulating shipping demand for these fuels. This means that for companies interested in developing their green shipping and green fuels business, these global policies will be of high business value, especially in regions with high shipping traffic such as Asia-Pacific.
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The region is already experiencing a lot of traction on the topic of hydrogen-based fuels for shipping, starting with the Lloyd Register’s Maritime Decarbonisation Hub’s (LRMDH) Silk Alliance initiative focused on fleets of containerships predominantly bunkering in Singapore followed by a proliferation of other green corridor initiatives across the region. And now there is increasing momentum to bring energy and shipping stakeholders closer to achieve these common decarbonisation goals together.
Active engagements across the Asia and Africa continents are in motion to ensure the supply chains are in place to meet domestic energy transition goals.
In the same month that the Global African Hydrogen Summit was held in Namibia, the ministerial Forum on China-Africa Cooperation was held in Beijing, followed by recent agreements between Japan and Namibia, demonstrating increasing interest from Asian countries to actively partner and increase dialogues between areas with promising green hydrogen potential.
Another example of this is the memorandum of understanding struck between Hyphen Hydrogen Energy and Itochu Corporation – a Namibian-registered green hydrogen development company and one of Japan’s largest general trading and investment companies.
Shipping’s decarbonisation will not happen in isolation – that is widely apparent. There are significant opportunities for the Asia-Pacific region promoting shipping’s decarbonisation through synergistic collaboration with neighbouring regions, including countries actively exploring their own hydrogen economies.
The Global South may present intriguing renewable energy resources and competitive future green hydrogen prospects, where maritime hubs in the Asia region could be among the potential consumer markets for these green hydrogen-based fuels. However, these supply commitments for maritime have been slow to materialise, so it will be critical to bridge supply and maritime demand hubs, which in turn will help incentivise investments and accelerate project timelines.
In an effort to drive dialogues across both public and private sector spheres, the LRMDH has facilitated the “Maritime Fuel Supply Dialogues” (MFSD), an initiative which serves as a platform for fostering dialogue and collaboration between stakeholders in the maritime and energy sectors.
By bringing together governments, industry leaders, and experts, these dialogues can help identify opportunities, address challenges, and develop the necessary frameworks to support the growth of green hydrogen production and utilisation.
During the second MFSD roundtable, there was a focus on enabling stronger investment appetite in the region for infrastructure developments and where policy support can address the lack of bankable offtake agreements, that has so far hindered project development.
The MFSD initiative sees an opportunity to aggregate demand at a regional level, across the emerging coalitions and initiatives within the region, to make a more compelling business case for infrastructure development; finding avenues where cross-sector synergies and diversification can bring more success to these commercial negotiations and in some instances be facilitated through public sector interventions.
Regional collaboration creates multiple benefits. Regional maritime hubs benefit from stable and competitive fuel supply security and regional synergies making for successful green maritime hubs, while fuel producing countries have the chance to leverage natural resources to explore untapped market opportunities in shipping.
By working together, these regions can unlock the full potential of green hydrogen and accelerate the transition to a more sustainable future, whereby job creation economic growth and a sustainable hydrogen economy is developed for the region to collectively benefit from the transition.
As the world continues to grapple with the urgent need for decarbonisation, the partnership between regions offers a promising path forward. By leveraging their respective strengths and working together, these regions can play a leading role in shaping a sustainable future for the maritime industry and beyond.
The writer is senior lead of green initiatives, Lloyd’s Register Maritime Decarbonisation Hub
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