We can’t let shipping and aviation fall through the green hydrogen gap
This week, the SASHA Coalition published a new report highlighting how green hydrogen will contribute to the decarbonisation of shipping and aviation. But for this to happen the ‘green hydrogen gap’ must be addressed. Exactly what is it, and how can we overcome it?
If shipping and aviation are to decarbonise in line with the goals of the Paris Agreement, a move away from fossil fuels will be necessary. But what alternatives are there?
The SASHA Coalition’s new report – The Green Hydrogen Gap – finds that all pathways to truly sustainable fuels for the shipping and aviation sectors require green hydrogen (produced from renewables), with some of them requiring carbon dioxide from a sustainable source like direct air capture (DAC).
But crucially, it also finds that there is a lack of policies in place to support the production of green hydrogen, which in turn is slowing down demand and discouraging investment. This is what we call the green hydrogen gap, and it’s making it difficult for companies to build and invest in new hydrogen projects.
In particular, we find that hydrogen production is behind on projections of where it needs to be to meet the temperature goals of the Paris Agreement, and that this is due to a lack of guaranteed demand across the board.
The drive for green hydrogen policy
While first-mover ambitious companies must urgently step forward with clear demand signals for hydrogen-derived fuels, their actions must be backed up by robust policies and regulations.
Despite this, the latest legislation from the EU and UK focuses more on supporting biofuels and – for shipping – the use of liquified natural gas (LNG) than ensuring that green hydrogen is prioritised for aviation and shipping.
The following policy signals demonstrate the current landscape supporting the uptake of hydrogen-derived fuels at both a UK and EU level:
The UK’s 2019 Clean Maritime Plan states that the vast majority of emission reductions will be achieved through a switch to low or zero-emission fuels, with “two low carbon hydrogen-derived fuels (ammonia and methanol), meeting the vast majority of energy demand by 2050”.
The EU has also recently reached a provisional agreement on its FuelEU Maritime regulation. This includes measures to support the uptake of renewable fuels of non-biological origin (RFNBO) such as a 2% renewable fuels usage target by 2034 if RFNBOs amount to less than 1% in the fuel mix in 2031.
ReFuel EU Aviation includes a headline target of 6% Sustainable Aviation Fuel (SAF) in 2030, but only 1.2% of that is synthetic fuels (including green hydrogen-derived) – these will rise to a target of 70% SAF by 2050, of which 35% must be synthetic fuels.
The UK government has committed to introducing a SAF mandate from 2025 onwards, which would see at least 10% of jet fuel to be made from sustainable feedstocks by 2030, although it does not currently contain any targets for synthetic fuels. The UK government has recently consulted on introducing a Power-to-Liquid (PtL) mandate, however.
How do we address the green hydrogen gap?
So do these policies and regulations go far enough to address the green hydrogen gap? We find that the answer is no – more needs to be done if shipping and aviation are to have access to fuels that will truly lead to sustainable decarbonisation.
Not only must policies incentivise the use of fuels that are scalable and have the greatest emission reduction potential on a lifecycle basis, but policymakers must recognise that green hydrogen will continue to be in limited supply in the coming decades. A cross-government approach must be taken to ensure that it is targeted towards sectors – such as aviation and shipping – with no more efficient routes to decarbonisation.
It's not all on regulation though, and industry must also clearly and loudly make their case that green hydrogen and carbon dioxide from DAC will be critical to their decarbonisation, or else risk missing out on access to the fuels that will enable their decarbonisation.
Addressing the green hydrogen gap is why Opportunity Green is facilitating the SASHA Coalition. By bringing together the aviation and shipping industries to make the case that green hydrogen and carbon dioxide from direct air capture (DAC) will be critical to decarbonising both sectors, we hope to move the dial on UK and EU policy by calling for policies and regulations that support the transition to hydrogen-derived fuels to be put in place where they don’t yet exist, and strengthened where they do.
To find out more, download The Green Hydrogen Gap report by the SASHA Coalition.
