Early Movers Harness Hydrogen Promise

By Carly Fields

Dubbed the ‘Decade of Hydrogen’, excitement is building around the infrastructure needed for a planned proliferation of hydrogen facilities around the world through to 2030. The current hydrogen project pipeline exceeds 360 gigawatts, 1,200 times the electrolyser capacity in 2020.

The numbers alone speak volumes but to amplify the vast potential, Dr Madana Leela Nallappan, regional analyst (APAC) and hydrogen specialist at the Energy Industries Council, makes the promise clear. “I like to think of hydrogen as the next offshore wind,” she said, speaking to Breakbulk. While the offshore wind sector has moved from nascent to blooming, smart project minds are already laying the groundwork for the hydrogen boom.

“At the moment, we have US$400 billion worth of projects and more than 400 projects in the hydrogen pipeline,” Nallappan said. Most of those are expected to come online beyond 2025; before then just 30GW of projects are expected. “Most projects are still in the feasibility stage. Very few have entered pre-FEED or FEED stages, and even fewer the EPC stage.”

This nascency is an opportunity for project cargo manufacturers, movers and handlers, according to Nallappan. “Yes, the hydrogen market is still nascent, but what I tell people is that it takes a long lead time to come up with new offerings, and to modify products. So that’s why you have got to start identifying the opportunities now and to determine where in the hydrogen value chain your products or offerings fit.

“Now is the time to start doing the groundwork – that’s what I usually tell supply chain companies.”


Wide Geographical Spread

For where to focus that ground-work, Nallappan highlighted the U.S. as being a step ahead of other countries. The U.S. already has hydrogen infrastructure and is thought to have the most hydrogen pipelines laid. Added to which, the U.S. Inflation Reduction Act signed into law on Aug. 16, 2022, directs new federal spending toward reducing carbon emissions and aims to catalyse investments in domestic manufacturing capacity, encourage procurement of critical sup-plies domestically or from free-trade partners, and jump-start R&D and commercialization of leading-edge technologies such as carbon capture and storage and, crucially, clean hydrogen. The Act is viewed as a driver for hydrogen in the U.S.

For China, Nallappan conceded that visibility on projects is low, how-ever she suspects that they are one of the top hydrogen developers. In the Middle East, eyes are on Oman, which was expected to release its hydrogen strategy in December 2022. There is also interest in hydrogen in Africa. Australia boasts many gigawatt-scale projects. Here, renewable energy developer CWP is working on the US$70 billion Western Green Energy Hub project, one of the biggest being looked at in the region. In South Korea, the emphasis is on liquefaction projects, while Japanese companies such as Mitsubishi and Itochu are working on international rather than domestic projects.

Europe has put its backing firmly behind hydrogen too. European Commission President Ursula von der Leyen recently described hydrogen as a “game changer” for Europe. “It is key in diversifying our energy sources and helping us reduce our dependency on Russian gas. We need to bring this niche market to scale.”

Speaking to Breakbulk, an EC spokesperson confirmed in December that the Commission is “actively cooperating” with all interested Member States towards possible upcoming Important Projects of Common European Interest in hydrogen and had received the first information on individual projects from Member States. The EC’s REPowerEU Plan, announced in May 2022, goes heavy on its support of hydrogen, launching a hydrogen accelerator to “unlock investment in renewable hydrogen use in industry,” with the ambition of using 20 million tonnes of renewable hydrogen in the European Union in 2030.


Rotterdam's Hydrogen Ambitions

Port of Rotterdam has a stated aim to become the international hub for hydrogen, where import, production, use, trade and transit all come together. By 2050, it plans for some 20 million tons of hydrogen to be routed through the port. The Port Authority is working with various partners towards the introduction of a large-scale hydrogen network across the port complex. Randolf Weterings, programme manager for electrification and hydrogen at the Port of Rotterdam Authority, said to Breakbulk: “In Rotterdam we already have a significant hydro-gen market and infrastructure. We will use that knowledge and asset base to scale it further up to 20 million tons eventually by 2050.”

Rotterdam sees an important role for itself in fulfilling the EC’s REPowerEU plan. It projects that it will be able to provide Northwest Europe with at least 4.6 million tonnes of hydrogen in 2030 – close to a quarter of the EU target. Weterings noted that to achieve this, policy wrinkles need to be addressed. These include the enabling of a legislative framework that attracts investors and provides certainty to both European and non-European actors; a robust certification system for hydrogen imports that will be operational by 2023 at the latest; market development focused on both development of new private pipelines and infrastructure in addition to reuse of existing pipelines; and stimulating ‘first-mover’ projects to speed up the construction of the necessary infra-structure for hydrogen imports.

The Port also acknowledged that the entire value chain needs to be developed to support the expansion of hydrogen. “This starts with the expansion of renewable energies and extends to the development of pro-duction facilities, including CCS for blue hydrogen, and the backbone and pipeline infrastructure to transport the hydrogen further. It is also important to create the conditions for the use of hydrogen in industry,” said the Port.

“We see that parts of the value chain are manufactured all over the globe and will come as sub-systems to the factories. Think about electrolyser stacks, transformers, compressors, and so on, which are really big pieces of equipment. Therefore, we definitely need sufficient logistics, which fits well with the developments in the break-bulk sector in the Port of Rotterdam,” Weterings said.

What is needed to support future hydrogen development? He said: “The task is so big that it is a matter of scaling up. This development has just begun and is not yet finished. How-ever, you do see that, for example, in the industry and mobility/fuel sector, using more hydrogen also requires new investments. Those investments are also coming.”


Alliances Forming Fast

Elsewhere in Europe, a new federal hydrogen council is to be established in Belgium with the Port of Antwerp-Bruges’ key to the country’s strategy and projects for the importation, production and throughput of green hydrogen. Jacques Vandermeiren, CEO Port of Antwerp-Bruges, said: “Together with our partners in organizations such as the Hydrogen Import Coalition, and the major players on our port platform, we are investing in infrastructure and projects to accelerate the import, transport and production of green hydrogen.”

In the UK, national port operator Associated British Ports has partnered with Air Products to bring the first large scale, green hydrogen production facility to the UK. The facility would import green ammonia from production locations operated by Air Products and its partners around the world. This would be used to produce green hydrogen, which would decarbonize hard-to-abate sectors such as transport and industry.

However, despite the mounting excitement, Nallappan does sound a note of caution. Demand for hydrogen is not yet there in the volumes that the market is anticipating. Current demand for hydrogen is 94 million tonnes per annum, according to the International Energy Agency, and predicted to rise to 115 million tonnes by 2030, only 20 percent more. “With the current number of projects that we have in the pipeline, that’s not going to meet even the current demand yet, but if the run rate of projects continues, I think by 2026, we could already be looking at a project pipeline that exceeds that 115 million tonnes per annum demand in 2030, predicted by the IEA. That poses a little bit of a risk for investors,” she said.

Nallappan also has advice for project cargo movers looking to get a foothold in this sector. One, identify where the key markets are and whether they align with what you’re doing at the moment. Two, identify where you fit in the value chain and if you don’t fit, how can you modify your services and products and equipment to fit. Three, build partnerships upwards with the main project developers. She lists common names as InterContinental Energy, Mitsubishi, Iwatani, Itochu, ACME Group, and Linde. “Another aspect is to collabo-rate with contractors who already have their foot in the door,” she added. “Many oil and gas supply chain companies already have relationships with companies like this, so engage with them and start talking about the potential of going into hydrogen.”


Middle East’s Hydrogen Ambitions

The Gulf Cooperation Council countries are styling themselves as pioneers in the hydrogen economy and announcements on projects are coming thick and fast from the region.

Oman – already a trailblazer in the hydrogen arena – ramped up its hydrogen ambitions with the launch of the company Hydrom late in 2022 to structure and accelerate the development of the green hydrogen sector in Oman.

Fully owned by Energy Development Oman and regulated by the country’s Ministry of Energy and Minerals, Hydrom is a central and independent entity orchestrating national interest in green hydrogen. Its main mandate is to masterplan the sector, delineating government owned land areas, structuring associated large-scale green hydrogen projects, managing the process for their allocation to developers and overseeing their execution as well as facilitating the development of common infrastructure, connected ecosystem industries and hubs.

Hydrom intends to award land blocks for green hydrogen projects in 2023 in two bidding rounds. Round 1 will see two blocks awarded in Duqm area by the end of the first quarter of 2023, while Round 2 will see an additional two to four blocks awarded in the Dhofar area by the end of the fourth quarter of 2023.

Oman’s over-arching aim is to produce 1.25 million tonnes of green hydrogen per year by 2030.

Green hydrogen is also proving attractive to Saudi Arabia’s NEOM, a smart city being built in Tabuk Province. Coming onstream in 2025, NEOM’s green hydrogen plant is expected to be the first of several similar plants to make a hub there for green hydrogen production and innovation.

The green hydrogen will be exported and used in NEOM for a variety of solutions – including fuelling clean autonomous electric vehicles.

Peter Terium, CEO of Enowa, NEOM’s Energy & Water company, commented: “NEOM is one of only six places on earth that has a perfect location when it comes to generating solar and wind energy. When combined with the desalinated water we produce, NEOM will be able to produce 650 tonnes of virgin green hydrogen per day. It will be home to the world’s largest green hydrogen plant.”

Carly Fields has reported on the shipping industry for the past 22 years, covering bunkers and broking and much in between.

PHOTO: Mock-up of Oxagon. CREDIT: NEOM