Shipping Toward Net Zero: Maritime Turns to Green Hydrogen and Ammonia

The maritime industry is entering a period of major change as global efforts intensify to cut greenhouse gas (GHG) emissions. The International Energy Agency (IEA) has highlighted the need for clean energy solutions—especially green hydrogen and ammonia—to help shipping cut emissions and reach climate goals.

Ships now emit about 3% of global greenhouse gases (GHG). So, there’s growing pressure to decarbonize fast. The IEA recently stated that we need urgent improvements in storage, safety rules, and policy support. These changes are essential for making these fuels viable for widespread use.

The industry’s goal is to reach zero emissions by 2050. However, the road to decarbonization is complex and demands progress in technology, safety, and policy. This is where green hydrogen and ammonia come in.

The Promise of Green Hydrogen and Ammonia

Green hydrogen is made using renewable energy, like wind or solar, to split water into hydrogen and oxygen. Ammonia, which can be made from green hydrogen, is another low-carbon fuel option.

Both fuels provide a cleaner option than fossil fuels. This is especially true for long-distance shipping, where battery-powered ships aren’t practical yet. These fuels are essential to meeting the International Maritime Organization’s (IMO) climate targets.

IMO shipping net zero roadmap — Source: IMO

The IMO aims to reduce shipping’s total annual emissions by at least 50% by 2050 compared to 2008 levels, and to peak emissions as soon as possible. Achieving these targets will require the wide-scale adoption of alternative fuels.

The IEA highlights that green hydrogen and ammonia can support these goals. However, industry players must tackle several key challenges:

Storage Challenges: Hydrogen is difficult to store due to its low energy density. It needs high-pressure tanks or must be cooled to cryogenic temperatures. Research is focused on safer and smaller storage methods. This includes metal hydride systems and compressed gas solutions.
Safety Concerns: Hydrogen is highly flammable, while ammonia is toxic. To avoid risks, ships need new safety systems, and crew members must receive updated training. The development of international safety standards will help guide proper handling and storage.
Cost Barriers: Green hydrogen is currently 2-3 times more expensive than traditional marine fuels. Ammonia is also costly to produce at scale. According to BloombergNEF, costs could drop by 2030 with scaling and technology advances. Reducing these costs will require financial support from governments and private investors.

Bloomberg further estimates that clean ammonia could represent 13% of global ammonia supply by 2030.

DNV, a global maritime classification society, says ammonia and hydrogen could be 60% of shipping fuel by 2050. This depends on policies that support their growth. Yet today, they account for less than 0.1% of total fuel use at sea.

Both clean fuels’ costs would go down by 2050, per IRENA’s projections.

RELATED: Shipping Toward Net Zero Needs $1 Trillion: What’s Inside the IMO’s New Framework

Boosting Maritime Decarbonization Through Policy

Policy support is critical to drive the shift toward cleaner fuels in shipping. Experts and industry groups are calling on governments and international regulators to create favorable conditions for investment in green hydrogen and ammonia.

Proposed policy measures include:

Clean Fuel Subsidies. Direct incentives can help shipowners adopt low-emission technologies and offset higher fuel costs.
R&D Grants. Public funding can support research into fuel storage, fuel cells, bunkering infrastructure, and vessel designs optimized for alternative fuels.
Carbon Pricing. Implementing a carbon tax or emissions trading system in the maritime sector can make green fuels more competitive.
International Standards. Harmonized regulations across countries can prevent market fragmentation and ensure global progress.

Some countries are already taking steps. Norway has introduced zero-emission requirements for cruise ships in its fjords by 2026. The EU has included shipping in its Emissions Trading System (ETS) starting in 2024, requiring ships to pay for carbon pollution. The bloc has also launched the “FuelEU Maritime” initiative to promote green fuel adoption.

The IEA and IMO are also working with ports, shipbuilders, and fuel producers to design a shared roadmap for green fuel adoption. In addition to cargo vessels, ferries and cruise ships are being looked at as early candidates for green fuel use.

GHG Emissions and the Urgency to Act

The shipping industry emits over 1 billion tonnes of CO2 annually. Without action, emissions could rise by 50% to 250% by 2050, according to IMO projections. The IEC stresses that if these emissions are not reduced, they can hinder global efforts to limit warming to 1.5°C above pre-industrial levels.

To stay on track, the shipping industry must embrace low-carbon technologies and provide clear emissions reports. Many digital tools are being created to track emissions in real time. This helps companies stay accountable and make smart choices.

Some shipping companies have already begun testing hydrogen and ammonia-powered vessels. NYK Line and Maersk are testing ammonia-fueled ships. Others are looking into hybrid vessels that mix green fuels and batteries.

The Poseidon Principles, signed by over 30 global banks, require shipping lenders to align their portfolios with climate goals. This initiative puts additional pressure on companies to invest in cleaner ships or risk losing access to finance.

Trends Shaping the Clean Fuel Market

The market for green fuels is expanding rapidly, driven by both regulation and investor interest. IEA forecasts say the global hydrogen demand could reach over 6 Mtpa by 2030.

By 2050, the total demand for green hydrogen will reach 46 million tonnes, according to IRENA. About 74% of this will be used to produce ammonia, 16% for making methanol, and the remaining 10% will be used directly as hydrogen.

green hydrogen requirement for 2050 — Source: IRENA

Ammonia demand is also expected to rise, especially in sectors like shipping and power generation. It can grow at an annual rate of 70% through 2030.

Key developments include:

EU Green Deal Initiatives. New climate laws are allocating billions of euros to fund clean energy, including maritime fuel infrastructure.
Private Investments. Companies such as BP, Shell, and TotalEnergies are investing in hydrogen production and supply chains. Maersk, the second-largest shipping company in the world, is investing in vessels powered by methanol and hydrogen. Other firms, like NYK Line and MOL from Japan, are testing ammonia-powered ships.
Green Corridors. More than 20 “green shipping corridors” are being planned worldwide. These include routes between Asia and Europe, and across the Atlantic. These corridors will enable ships to refuel with green fuels and test low-emission technologies.

These initiatives show progress. But to fully implement them, we need stronger partnerships. This includes working with governments, industries, and environmental groups.

In January 2024, the Global Maritime Forum announced that over 200 companies had joined efforts to decarbonize shipping, focusing on scalable fuel alternatives and supportive regulations.

Navigating Toward Zero Emissions

Decarbonizing the maritime sector is no longer optional. It’s a needed change due to environmental issues, investor demands, and new rules. The transition needs big investments and teamwork. But it also offers chances for new ideas and long-term savings.

The push for green hydrogen and ammonia is helping to reshape the industry’s future. These fuels offer a path to meet zero-emission targets while supporting cleaner global trade. With ongoing backing from governments, industry players, and the public, the move for maritime decarbonization is speeding up.