Hydrogen cost remains significant barrier for adoption in shipping: Howden CCO

The high cost of hydrogen remains one of the most significant barriers to its adoption as a marine fuel, despite growing interest in the fuel, according to Hari Subramaniam, chief commercial officer at maritime insurance company Howden.

Industry estimates suggest that hydrogen is currently 10-12 times more expensive than liquefied natural gas and four-five times costlier than alternative fuels such as ammonia and methanol. At those price levels, widespread adoption remains commercially challenging for shipowners, Subramaniam told Platts, part of S&P Global Energy.

Platts assessed the Indian renewable hydrogen long term contract at $3.163/kg on March 19, down 0.84% week over week.

Hydrogen also requires significant investment in specialised storage, transport and bunkering infrastructure. This adds another layer of complexity and cost for both ports and ship operators.

Hydrogen will need to achieve price parity with other emerging green fuels before it can be considered by shipowners at scale, according to specialists at Howden Group.

"At present pricing levels, hydrogen is simply not competitive ... until costs fall significantly and infrastructure becomes more widely available, its uptake in the maritime sector will remain limited," Subramaniam said.

Green fuel policy

The International Maritime Organization's Net Zero Framework saw a delay in 2025 due to a lack of consensus among member states. The framework aimed at accelerating progress toward the sector's decarbonization.

"If member states are unable to reach an agreement on measures such as the Net Zero Framework, it affects confidence across the market," Subramaniam said. "That inevitably slows the adoption of alternative fuels more broadly -- not just hydrogen."

Battery-electric advances

Compared with fuels such as methanol or biofuels, hydrogen presents significantly greater operational and technical challenges.

The fuel's extremely small molecular size makes it prone to leakage, while its flammability introduces heightened explosion risks. In addition, hydrogen flames are nearly invisible to the human eye, requiring specialised detection systems. Robust ventilation systems are also necessary to prevent the accumulation of hydrogen vapours onboard ships.

While hydrogen faces these hurdles, battery-electric propulsion is gaining traction in certain market segments, particularly for inland craft and short-distance operations.

Electric propulsion systems offer advantages in terms of availability and ease of handling, and they require significantly less specialised infrastructure than hydrogen.

However, Howden does not see batteries and hydrogen as competing solutions.

"Different technologies will serve different operational needs," Subramaniam said. "Battery-electric systems are well suited to shorter routes, while hydrogen may eventually play a role in longer-distance voyages where battery technology is currently less viable."

As the maritime sector works toward its long-term climate goals, Subramaniam expects a multifuel future rather than a single dominant solution.

"The decarbonisation of shipping will involve a combination of technologies and fuels," Subramaniam said. "The key is helping the industry manage the risks while enabling progress toward lower-emission operations."