Setting Course, an ABS Podcast

Hydrogen Value Chain With Provaris Energy

• American Bureau of Shipping • Season 1 • Episode 24

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Hydrogen’s potential as an alternative energy source reaches well beyond marine fuel applications. It also has potential for on-land commercial energy and in energy-intensive industrial operations. As such, the transportation of hydrogen by ship could play a key role in the emerging hydrogen value chain.

In this episode of Setting Course, an ABS Podcast, Martin Carolan, Managing Director and CEO of Provaris Energy; Stergios Stamopoulos, Director of Global Sustainability for ABS; and Ibrahim Muritala, Senior Sustainability Engineer and Global Hydrogen Lead for ABS, join host Brad Cox, ABS. They discuss the current state of hydrogen production, the bottlenecks in scaling green hydrogen availability, and the technical and operational challenges in transporting hydrogen.

Please share this episode on social media, leave a review on your favorite podcast platform or send feedback to podcast@eagle.org. Learn more about how ABS is supporting the maritime industry at www.eagle.org.

Key Points

  • Hydrogen is gaining momentum as a zero-carbon energy source.
  • Investment in hydrogen requires major capital and infrastructure.
  • Hydrogen production is currently dominated by grey hydrogen.
  • Safety and operational standards are critical for hydrogen handling.
  • Scaling green hydrogen production faces significant challenges.
  • Compressed hydrogen is simpler for short-distance transport.
  • The future of hydrogen depends on technological advancements, infrastructure development and industry collaboration.


Guests
Martin Carolan is Managing Director and CEO of Provaris Energy, a developer of integrated compressed hydrogen projects for export to regional markets. Provaris aims to develop green hydrogen supply chains that are simple and efficient to enable the global transport of zero-carbon energy. Martin holds a graduate diploma in applied finance from the Financial Services Institute of Australasia (FINSIA) and a bachelor’s degree in business from the University of Technology, Sydney.
 
Stergios Stamopoulos is the ABS Director of Global Sustainability for the Western Hemisphere, leading ABS activities in the Americas and Europe regions. Under his leadership, the ABS sustainability centers in Houston, Athens and Copenhagen are assisting ship and offshore owners, operators and other stakeholders with achieving their sustainability goals. He joined ABS in 2007 as an engineer and has worked in Greece, South Korea and the U.S. in a variety of roles.
 
Dr. Ibrahim Muritala is a distinguished engineer with over 17 years of experience in academia, research and the energy industry, including the oil and gas, maritime, and offshore sectors. He currently serves as the Global Hydrogen Leader at the ABS Global Sustainability Center in Houston, where he provides strategic leadership in hydrogen-related decarbonization initiatives. As a subject matter expert, Dr. Muritala helps the marine and offshore industries navigate new fuels, offering technical assessments, feasibility studies and strategic guidance across the hydrogen value chain.


Brad Cox (00:08)
Welcome to Setting Course, an ABS Podcast, where we're charting the future of the marine and offshore industries. I'm Brad Cox, and I'll be your host today. 

We have another great episode lined up for you. As industries and governments around the world look at reducing their emissions and shoring up energy security, hydrogen has emerged as an interesting prospect for a zero-carbon energy source. An important component of the resulting value chain is the transportation and storage of the fuel, particularly on board ships.

Joining us to discuss hydrogen, the value chain, and the shipping industry's place in all of it is Martin Carolan, Managing Director and CEO of Provaris Energy. Provaris is a developer of integrated compressed hydrogen projects for export to regional markets. Thank you for joining us, Martin.

Martin Carolan (00:50)
Thank you, Brad. Great to be here.

Brad Cox (00:52)
I'm also pleased to have ABS Director of Global Sustainability Stergios Stamopoulos back in the studio today. Thank you for being here, Stergios. 

Stergios Stamopoulos (00:59)
Thank you for having me, Brad. Nice to be here.

Brad Cox (01:02)
And it's also great to have a new voice on the podcast, ABS Senior Sustainability Engineer and Global Hydrogen Lead Ibrahim Muritala. Thank you for being on the show, Ibrahim.

Ibrahim Muritala (01:11)
It's a great pleasure to join you. Thank you.

Brad Cox (01:14)
Let's get started here. Alternative fuels and energy sources have been and will be a long game. Technology, infrastructure, supply, all of that takes time. So, Martin, with so much being invested, where does hydrogen stand today and how does the industry balance near-term ambitions while still building toward a hydrogen future?

Martin Carolan (01:33)
Thanks, Brad. I think it's important to remember where we're starting and as to where we want to go because today, while there's some 90 million tonnes of hydrogen produced globally, most of that is produced and consumed on site. So I think it's less than three percent of global production today is shipped in some form. 

And then the other factor here, you've got this transition from what is grey hydrogen to this low-carbon ambition. So, that's going to require significant new investments and new technologies in new ways. And not just one, there'll be alternate pathways for storage and transport as markets like Europe, where we're focused, they have been net importers of energy for some time and will continue to be. And that's going to be the same case for hydrogen.

So, I think it's important that the industry looks at various alternatives. We are working closely with utilities around offtake, in Germany specifically, and they are looking for multiple sources of supply, multiple technology platforms, and they want to have a portfolio approach. So I think that opens up lots of opportunities for different technologies and different providers.

Brad Cox (02:45)
And Stergios, from your view, where does hydrogen stand today? And how do we get to the really ambitious future for hydrogen?

Stergios Stamopoulos (02:54)
Brad, I will echo what Martin said. Hydrogen is gaining momentum. But we also need to look at the maritime investment, which is still in its infancy, if I may say. Governments are stepping in with incentives such as funding, tax breaks and regulations to accelerate hydrogen adoption.

The way I would look at it is that investing in hydrogen requires major capital and there's still uncertainty around fuel availability, infrastructure readiness and the regulatory frameworks, which is always very dynamic. So the industry, I believe, has to take a phased approach using existing lower carbon fuels now while investing in the infrastructure that will make hydrogen viable in the long run.

Brad Cox (03:42)
And Ibrahim, obviously as Global Hydrogen Lead, you're closely entwined with all of this in the industry. So how do you see this playing out?

Ibrahim Muritala (03:50)
Basically, when we look at the investments from the maritime angle, when it comes to hydrogen, we notice that hydrogen lags behind when we compare hydrogen to other alternative fuels like LNG, ammonia, methanol, and others. So, it's important we look into a kind of a transition process itself in the adoption of hydrogen because there is a lot of investment decisions that require a kind of holistic approach in terms of balancing technology maturity, environmental performance, regulatory requirements, as well as economic viability across a wide range of other alternative fuels. So, hydrogen is still at a kind of early stage, because it requires a lot of other logistical considerations, which will really allow us to adopt hydrogen quickly. But it's a process. We are getting there. We've seen a lot of buildup from the knowledge from LNG. And I think what we should have now is a kind of gradual adoption.

Brad Cox (04:54)
So, you guys talked a little bit about that economic viability, ramping things up, ramping up production. That's one hurdle to getting things where we need it to go. But really, what are the technical and operational and safety challenges that the industry must overcome in terms of storage and handling in maritime transportation? Martin?

Martin Carolan (05:13)
Yeah, thanks, Brad. I think what we've been doing in our development, which we've been going since 2020, 2021. We started working with ABS as a classification society back in 2020, dealing with them on our intentions of design and containment. So, safety has been absolutely one element of focus from the outset.

Hydrogen has been around for decades. We use compression in the way of which we store in gaseous form, that's been around for decades, but in the context of scale of storage, that is new. So, we had to work closely with ABS in particular through AIP and then the latter stages of a FEED design approval making sure that the focus has not just been on technology or design, but it's been on hazard studies around catastrophe, explosion, all those things. 

So, we've been working on the basis that handling is imperative from day one and trying to minimize the amount of leak points, for example. You have one inlet, one outlet, for example, on our closed system. So, I think that's been one of the major hurdles we've had to overcome just to ensure there's acceptance of systems at this scale.

Brad Cox (06:24)
And I'm glad you mentioned the AIPs and stuff like that. Stergios, from the perspective of the class societies, what are those big challenges from a technical, operational, safety that have to be overcome to really help the industry get where it needs to be?

Stergios Stamopoulos (06:39)
So, Brad, there are a couple of things that classification societies are looking at. First of all, there are certain engineering challenges by the nature of hydrogen as a molecule. So that ranges from low energy density to high flammability and so on. 

So, classification societies, like ABS, we are working closely with the industry — Martin and Provaris are a very good example — in looking at all these challenges, working with them to provide, you know, setting up safety and operational standards. Also, we try to work with not only the vessel itself and the operators or the owners, but also with the value chain, the infrastructure, ports, bunkering of hydrogen is a big thing. 

In general, the role of ABS is supporting also research and development around different hydrogen related technologies.

Brad Cox (07:38)
And Ibrahim, what about from your view? What are those big challenges that have to be overcome and how can we overcome those?

Ibrahim Muritala (07:44)
Well, there's a lot of challenges, but many of them have been well put in place, especially from other industries. So, we might have to adopt some method, maybe for example, from the chemical industry. 

Some of the key challenges which we might observe has to do with the handling of hydrogen in terms of storage, in terms of transportation, because there's a possibility that this molecule itself could be compressed, could be liquefied. And all these require different protocols in terms of safety, in terms of management, especially when you talk about bunkering, transport and the operational use. Especially this requires some stringent protocols, some advanced detection system needs to be put in place to ensure that the safety issues are well in place because, at the end of the day, it's a very flammable gas. And we just need to ensure that all the guidelines, the rules are well in place and engineers and different stakeholders need to be trained so that they could handle these safety issues relating to hydrogen. 

Brad Cox (08:47)
So, the challenges around sourcing green fuels is something we've talked about on the podcast before. Martin, how will the global energy industry scale to meet that growing demand for green hydrogen? 

Martin Carolan (08:59)
I think the industry is going through a very large reset of expectations right now. If you go back to 2020, 21, 22, there's a lot of consultants did studies with no real experience in the integrated approach. They were looking at silos of production, storage, transport, and then receiving. But what we found over the last three years, you need to have an integrated view of how the energy efficiency starts at electrons at one end and delivered back as molecules at the other. 

I think efficiency and cost right now are the things that we really need to focus on in order to get to decisions of investment, which then lead to scale. So, shipping solutions will still need to be proven, but I think we have to come back to what is a realistic scale that also matches demand, the incentives that were spoken about and regulations.

So, we have been aligning ourselves with a modular approach using compression. The technology of compression is proven. The equipment's available off the shelf. I guess it's the containment system within our vessel design, which is new and it needs to be rigorously approved. But I think too many parts of the industry early on focused on replicating the LNG sector, for example. And we know that started at a small scale at some point. So, LPG, LNG, it didn't start at multi-million-ton trains, it started 500,000 units as well. 

I think the industry has gone through this groundswell of support. There's been some unrealistic pricing and cost expectation set that's shrunk back down to reality. And now we're starting to see the signs of green shoots where demand side is coming and then the supply side is being stimulated through policy and I think we just need to match where the market will be. And if the industry can start to see firm contracts, FIDs taking place this year into next year, I think we can have a much better run.

Brad Cox (10:54)
Andr Ibrahim, what do you see as far as how the industry can scale and start to meet that growing demand?

Ibrahim Muritala (11:02)
In terms of scaling, there is a lot of obstacles in the way of scaling green hydrogen specifically. As we know of today, majority of the hydrogen that we use, majority comes from fossils. And scaling to have green hydrogen will require a lot of renewable energy in terms of installation. It also requires us to have a lot of electrolyzers to be manufactured for this process. And at the same time, the construction, in terms of storage, in terms of infrastructure that is required to transport, is also a big question. And when we look at the challenges in terms of infrastructure, we know the high cost of production when it comes to green hydrogen is still playing a very big issue.

And policy uncertainty is also a big question. And it's important we try to see how we can balance all these bottlenecks and try to see where we can kind of create a pathway for the improvement of high production of green hydrogen and also the supply chain around different demand and supply nexus.

Brad Cox (12:06)
Stergios, did you have anything to add to that?

Stergios Stamopoulos (12:08)
Just echoing what Ibrahim said that scaling up green hydrogen is a challenge. There needs to be a huge expansion on renewable energy. And everything that we discussed, at its foundation, we need to consider the availability of funds. Someone has to pay for the scaling up. So there are initiatives, regional initiatives on providing the necessary funds. For example, a recent development is the European Commission Clean Industrial Deal that also covers hydrogen in terms of launching a hydrogen bank, budgeting around the bank, and start promoting and mobilizing and connecting off-takers and suppliers with financing and de-risking to facilitate the whole hydrogen production scale-up.

Brad Cox (12:57)
And Martin, steering back to you, obviously, we mentioned ammonia earlier. Some people talk about ammonia as a hydrogen carrier. So where does ammonia fit into that equation?

Martin Carolan (13:07)
Today, the popular model has been to gravitate towards ammonia production because it's a proven way to synthesize and produce the liquid. There are shipping units available today and some people are betting on that being a growing market and ordering new vessels. But what we've seen here in Europe in particular is that the industrial user predominantly wants hydrogen.

So, then there's this conversion factor. So, you need to land, store that and crack that back to hydrogen. So, there are important pilots taking place. From an industry perspective, we want this to be successful. But fundamentally, you lose 25 percent of the cargo through reconversion. So, there's a capital and energy intensive process there. There's a timeline of people are unsure what the pilot success is going to be. 

So, I think what we're suggesting in our approach is that you need to look at moving the molecule at a scale of which matches the regional supply demand equation. I think that's why we focused on Europe. Some of the bottlenecks we just discussed around availability of RE, the scale of electrolyzer availability and financing. So the scale of projects we're looking at here, which are less than a gigawatt, they're moving from two to three to 400 megawatt scale, they seem to be achievable.

And in original context, it just doesn't make sense to turn that product into ammonia, ship it a short distance and then convert that back. That's our view is to keep it in gaseous form and you can deliver at a lower cost and then let the big scale regions of is it India, is it Australia, is it the Middle East or the Gulf Coast will produce a lot of ammonia.

Brad Cox (14:42)
Martin, so I think you kind of overlapped into our next question a little bit here. Obviously you guys are deeply involved in several green hydrogen projects, particularly around the storage and transportation of compressed hydrogen. So, can you provide a little insight into the work Provaris is doing and maybe some insight into how the industry has progressed on transporting compressed hydrogen in bulk?

Martin Carolan (15:03)
So, first of all, it doesn't exist at scale. So, there's been compressed form of hydrogen from a ground transport perspective. You've got providers out there who've had great success using trailers with either pipes or carbon fiber bottles. And that's been a success. That's emerging. We've looked at it from a bulk scale perspective. So, we've started with extensive work with class, looking at the tank, integrating with vessel. And then we've then looked at loading arms, we've then looked at compression, and then we've integrated with both generation of electrolyzers and then looking at electrons. 

So, we've been working collaboratively with industry. We could sit back as a shipping industry and wait for it to come, but we've actually gone after it. So, we've got supply partnerships here in Norway and the Nordics, and we're looking at Spain, where we're looking at the production side and integrating there. And then we've worked with the three German utilities, which we have under MOU. One of those is Uniper, which in January this year we signed up as “Term Sheet.” So that was supplied from the Nordics into the Northwest Europe market. And that's at a scale of 40,000 tonnes, which is around a 250, 300 megawatt scale project. So think that's the scale of which we've seen in our work that utilities are happy to take on a path to binding agreements. But it's all been about integrating with both supply and end user, which has had the success of us to move forward. 

We signed our second collaboration here in Norway, and we've actually seen a pipeline of these projects that are 200-300 megawatt scale, 30 to 40-50,000 tonnes, depending on utilization, in a regional context of Europe. So, we're starting to see the emergence of supply matching demand and I think compression's in a sweet spot to try and take care of that. Some of that will be used as an ammonia project I'm sure but it makes sense to use compression.

Brad Cox (17:01)
And Ibrahim, can you speak a little bit to that compressed versus liquid transport of hydrogen — pros and cons, differences, that kind of thing?

Ibrahim Muritala (17:10)
Yes, thank you. Compressed hydrogen avoids the energy intensive liquefaction process, which also makes it a little bit simpler and more efficient for short to mid-range transport. However, compressed hydrogen has lower energy density and requires high-pressure tanks. Looking into the liquid hydrogen on the other hand, this has a high energy density, making it suitable for long-distance shipping and other possibilities. But it also requires a kind of cryogenic storage, which also makes it to have some kind of increase in costs, as well as maybe some kind of energy losses. At the end of the day, comparing both also requires one to look into the kind of market that one is serving. So, in terms of long distance, in terms of short distance, in terms of mid-range distance. So, both have their usability and applicability out there.

Brad Cox (18:07)
So, looking further out, what's the outlook for hydrogen? Will it be a big piece of the future energy puzzle? Is it a matter of technology catching up to demand before we can kind of see that happen? Martin, you want to take that one first?

Martin Carolan (18:21)
Yeah, I think there's lots of ways to answer this question. Initially, hydrogen was seen as what they called it the Swiss Army knife of solutions. Clearly, that's filtering out now. We personally focus on the industrial user set. They have a demand for decarbonizing their energy-intensive processes. It's not so much the energy source. It's what do they use that fuel for.

It definitely has a role to play. We're seeing through this reset that I spoke about, we're starting to see there's still great ambitions by the European industrial market to kickstart. There's commitment from the European Union. There's commitment from federal governments. You’re starting to see infrastructure be put in place with the TSOs collectively getting together in Germany, defining a plan. And the governments and TSOs financing that plan. So, FIDs are now taking place on the pipeline which is required to service these industrial hubs. 

So, I think there's a lot of good news. I think — unfortunately the sector has received a lot of negative news with some large scale projects, big energy has rolled back on some of their commitments. But I think there's still a viable business opportunity and I think it may be slower, but it's still looking to commence at an industrial scale or bulk scale in that 2028 to 2030 window. That's where we see demand for imports. And so, as a shipping provider, we need to make that happen. But also it needs the right level of supply, the right cost.

Brad Cox (19:52)
And Stergios, of course, you've been involved in the ABS Outlook over the years. What do you see as the outlook for hydrogen?

Stergios Stamopoulos (20:00)
So, it's really more of, if I may describe it, a chicken and an egg situation. So the technology is advancing. Fuel cells, hydrogen-ready engines and improved storage solutions. But we still, at least looking at it from the maritime viewpoint, there are some gaps in the infrastructure to make it viable at scale.

So, ports, pipelines, storage facilities, all need major investments, as we previously said. And until those pieces are in place, there's going to be some challenges with relating to hydrogen when you compare it to other alternative fuels or energy sources. 

So, however, that said, hydrogen will play a big role, especially for industries that cannot easily either electrify or use other energy sources such as shipping and heavy industries, as Martin previously said on the European front. But realistically, it won't be something that will happen tomorrow. It will take some time and there is a need for everybody to work together.

Brad Cox (21:13)
And Ibrahim, any additional thoughts on the outlook for hydrogen?

Ibrahim Muritala (21:16)
Yes, hydrogen has been playing a key role when it comes to decarbonization of different economies and different industries. It's going to still be a major player in terms of helping transform excess electricity that will be generated from these renewables because this is the major way for us to be able to convert from electrons to molecule. It's going to be a feedstock as well as a commodity. So as far as the future trend is concerned and what it's all about, it's going to give us a kind of entire value chain opportunity when we look at the hydrogen economy itself as a big area. 

Technological advances — it's important. Infrastructure development is key to ensure that hydrogen will continue to play its major role in terms of decarbonizing several sectors like shipping, maritime, and other energy-intensive industry that requires hydrogen. So, it's important that all hands must be on deck to ensure that we put necessary opportunities together to allow this work.

Brad Cox (22:24)
Okay, great. Well, to wrap this up, I was wondering if each of you had any closing thoughts you'd like to leave with our listeners. Martin, why don't you take that one first?

Martin Carolan (22:32)
Yeah, thanks Brad. I think two things. One, you don't dismiss the industry needs to start at a scale which is related to both supply, demand and financeable, which is matching regulations. And two is that when you talk to the downstream industrial users and then there's the traders and the buyers, they want a portfolio of supply sources. I think regionally Europe has a role to supply. It will be the main demand center for some time. The U.S. Gulf Coast is certainly taking its place with ammonia facilities building shape. Then the swing volumes will be the bigger volumes that are further away. So, I think we need to start regionally and then build out to a global footprint.

Brad Cox (23:17)
And Stergios, any closing thoughts for our listeners?

Stergios Stamopoulos (23:35)
Final thoughts. Hydrogen is not going to be an overnight solution, but it's a very critical piece of the puzzle. So right now, we're in the what I call investment and infrastructure building phase. And while the industry is facing challenges, the momentum is there. So, more to come in the very near future.

Brad Cox (23:45)
And Ibrahim, any closing thoughts?

Ibrahim Muritala (23:47)
Collaboration between policymakers in terms of regulation and industrial stakeholders, as well as financiers will be a key part in terms of accelerating the hydrogen economy. And at the same time, when we look at the next decades, there will be a kind of dominance in terms of clean energy and hydrogen will continue to play a key role in terms of providing a technical solution for decarbonization, because at the end of the day the purpose of all this is the environmental sustainability. But overcoming infrastructure challenges must be well put in place to ensure that hydrogen will play its role.

Brad Cox (24:26)
Okay, great. Well, anytime we talk about alternative fuels, energy sources, it's always a super interesting discussion. And I think this one didn't disappoint. So, thank you, Martin, Stergios, Ibrahim. Really appreciate you guys being on and being with us for this episode.

Martin Carolan (24:40)
Thanks, Brad.

Stergios Stamopoulos (24:41)
Thank you, Brad for having us.

Ibrahim Muritala (24:42)
Thank you.

Brad Cox (24:43)
And for everybody listening, thank you for joining us for another episode of Setting Course. Be sure to subscribe, leave a review and share this episode. To keep up with the latest sustainability developments, visit us at www.eagle.org. Thank you for listening.