Source: adapted from Notteboom, T., Haralambides, H., 2023, Seaports as green hydrogen hubs: advances, opportunities and challenges in Europe, Maritime Economics and Logistics, 25 (1), 1-27
There is still a considerable production cost difference between green hydrogen and fossil fuels. A key factor in bringing green hydrogen costs down, ensuring its availability on a large scale, is scalability. Mobilizing investments to scale up the production of green hydrogen will require continued efforts towards more international collaboration to shape policy, regional and multilateral agreements and supportive frameworks from regulatory bodies. The scalability aspect comes with a lot of requirements which can be met more easily by certain locations such as seaport areas. Key requirements for ports to serve as green hydrogen hubs include:
- Availability of land for hydrogen production and storage infrastructure: The production and storage of green hydrogen requires large surfaces. This challenges ports to make enough land available for production and storage activities which, for many ports, is not an easy task due to land unavailability. Land area is required for electrolysers and related equipment such as transformers, rectifiers, water supply, cooling water towers, separators, dryers and compressors. The overseas import of hydrogen carriers (such as ammonia), requires berths and conversion infrastructure for liquid hydrogen, ammonia and LOHCs (liquid organic hydrogen carriers). Room for energy supply infrastructure, for the cracking of ammonia (conversion to hydrogen) and the recovery of hydrogen from LOHCs is also necessary. Furthermore, one would need storage space for hydrogen carriers and compressor stations, to be able to inject hydrogen in a pipeline system.
- A good maritime and landside connectivity to high capacity electricity grid and to hydrogen infrastructure and assets: The production and storage of green hydrogen in seaports requires a considerable amount of renewable energy and this comes with its own challenges. Some countries face mounting capacity issues in the high-voltage grids, partly as a result of complex planning and permitting procedures. This can hamper the energy transition efforts.
- A strong demand base for green hydrogen: Quite a number of larger seaports have developed into major industrial and logistics ecosystems, and are well connected to other industrial clusters in proximity. Hydrogen demand could come from hard-to-abate industrial applications, logistics (e.g., as a fuel for ships, barges and trucks, directly or through transformation into ammonia or methanol) and industrial applications (e.g., green feedstock/reactant in chemical production, metal treatment, food processing, etc., or as a fuel).
- Technological innovation and policy support: In terms of technological progress, the main focus is on minimizing the use of scarce materials for electrolysers, increasing the stack lifetime and system size so that large-scale production can take place, and reducing cold start-up time (solid oxide systems). In terms of policy support mechanisms, direct financial support and fiscal incentives for R&D and production are key at the first stages of market entry and scale-up.
- Access to large-scale project finance: Large green hydrogen projects demand significant investment, requiring the full spectrum of sustainable finance instruments and technical expertise. Many seaports are home to individual plants or even entire clusters or ecosystems of large energy-related companies. The proximity of these establishments and the existing inter-firm exchanges among them facilitate fostering strong partnerships also in the area of green hydrogen production and distribution.
- Public acceptance of large green hydrogen projects: Ports which successfully reach out to civil society and industry stakeholders, towards creating public acceptance of green hydrogen projects have a competitive edge in the green hydrogen economy. Reaching out to stakeholders on the green hydrogen theme concerns not only the provision of information on strategic plans and projects. It also requires efforts to educate the wider population on the sense of urgency in energy transition and the wider ramifications of green hydrogen adoption on emissions, infrastructure and asset needs. Next to information provision, port authorities are also challenged to consider an active participation of certain stakeholder groups in project planning stages, where deemed valuable, or when existing regulations and ESG frameworks and practices require such an involvement.