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Shell backs hydrogen for shipping's decarbonization

Highlights

Shell tags hydrogen as best decarbonization option

Says LNG is cleanest fuel currently available in meaningful volumes

London — Energy group Shell has revealed plans to back hydrogen fuel cells on the road to shipping's 2050 decarbonization goals, tagging LNG bunkers as the bridging fuel between that and conventional oil-based bunker fuels.

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"We believe liquid hydrogen to be advantaged over other potential zero-emissions fuels for shipping, therefore giving a higher likelihood of success," it said in its latest report, 'Decarbonising Shipping: Setting Shell's Course.'

The International Maritime Organization has set a goal to cut greenhouse gas emissions by at least 50% by 2050 and improve the sector's efficiency by at least 40% by 2030 and by 70% by 2050.

In Shell's previous report on the subject in July, 80% of correspondents from the shipping industry said the importance of decarbonization had increased significantly over the past 18 months.

Shell is likely to have studied liquefied hydrogen extensively, which in cost terms requires "very high capex investment" and would probably need five to 10 years of development before commercial use emerges, said Marc Rechter, CEO of hydrogen project developer Resilient Group.

"It needs significant volumes in infrastructure both on the liquefication side and gasification side, as well as the shipping itself," Rechter said. "2030 is probably a good target seeing a larger-scale liquefied hydrogen movement."

Shell is involved in several key hydrogen projects around Europe, including the NortH2 project, the largest announced green hydrogen project in Europe.

The project, which is a consortium of Shell, gas grid operator Gasunie and Groningen Seaports, would produce upwards of 3-4 GW of offshore wind capacity by 2030 and 800,000 mt/year of green hydrogen by 2040, according to project plans.

Bridging the gap

Despite the properties of hydrogen being well understood, Shell said there was "still much work to do". While global availability and infrastructure is still being developed, "LNG could be used in fuel cells -- the only fuel available today to help advance this critical technology. In this way, shipping could lay the foundations for future fuels while securing immediate emissions reductions."

LNG as a marine fuel has been gathering momentum as the shipping industry faces growing pressure to lower its carbon footprint.

"LNG can help lower greenhouse gas emissions now," the company said. "Compared to heavy fuel oil, from extraction to combustion LNG reduces greenhouse gas emissions by up to 21% for 2-stroke slow speed engines and up to 15% for 4-stroke medium speed engines...LNG is the cleanest fuel currently available to shipping in meaningful volumes."

Shell is one of many big players in the industry which have taken efforts to invest in it. "There are more than 75 ports with LNG refuelling infrastructure worldwide, and Shell aims to double its own LNG fuelling network by the mid-2020s," they said.

On Oct. 1, Singapore's first LNG bunker vessel was officially named the "FueLNG Bellina" and will be supplied with LNG by Shell.

In September, shipping company SCF took delivery of the "SCF Barents" a 174,000 cu m LNG carrier which was immediately put to service under a long-term charter agreement with one of Shell's subsidiaries.

Shell has three LNG bunker vessels in its fleet, delivering volume in Rotterdam and throughout Northwest Europe and also has an agreement for an LNG bunker barge to service customers along the southern east coast of the US. The company has also charted three LNG-powered offshore supply vessels for its deep-water operations.