Winds of change to sweep through German seaports

The world is moving away from fossil fuels and so is the maritime industry. Ports — being an important maritime segment — are facing significant changes. For the German port sector, the transformation is seen as a mammoth task that lies ahead.

The energy transition in seaports has multifaceted perspectives because not only energy sources are handled in ports but also energy is used and electricity produced.

In the year 2020, German seaport companies handled 22.1 million tons of crude oil, 7.4 million tons of coal and 55,022 tons of natural gas. In the future, there will be increasing demand for alternative energy sources such as liquefied natural gas (LNG) and hydrogen or its derivatives, according to the Association of German seaport operators (ZDS).

“Handling areas and facilities have to be adapted: from coal to hydrogen, offshore wind, LNG and biomass. The tank infrastructure must meet the new requirements of shipping: from heavy oil and diesel to a variety of new alternatives. And at the same time, the port companies are converting their own operations,” Daniel Hosseus, Managing Director of the ZDS, said.

“We are very well placed but the topic of hydrogen shows how demanding the task is.”

At the terminals, equipment is being upgraded to use cleaner fuels with low emission. Alternative fuels, but also electrification, play a major role here. In addition, some companies generate climate-friendly electricity themselves with wind energy or photovoltaic systems at their premises.

Within this transformation process, green hydrogen is seen as an energy carrier that has a particularly high potential to contribute to the reduction of emissions that are harmful to the climate. Although the further development of the future use of hydrogen and its synthesis products cannot yet be precisely predicted, seaports can play an important role in a future green hydrogen economy as transshipment, utilization and production locations.

In its latest working paper, ZDS explored opportunities and challenges for German seaports in relation to the handling of hydrogen, its provision as a marine fuel, its use at terminals and the production of hydrogen in the port area.

German ports and green hydrogen economy

Seen as an essential element in the (EU) energy transition, hydrogen can account 24 percent of final energy demand by 2050, according to a study by Fuel Cells and Hydrogen Joint Undertaking (FCH JU).

However, both German and European hydrogen strategies indicate that large quantities of green hydrogen or its derivatives will have to be imported in Germany and Europe because domestic production will not be able to meet demand.

Therefore, the hydrogen economy offers a myriad of opportunities for German and EU seaports. Seaport operators will be able to open up new business areas.

These encompass transshipment, hydrogen as a marine fuel, the use of hydrogen as well as its production in ports.

Maritime transport of hydrogen

In the future, significant quantities of hydrogen will have to be transported from production sites to industrialized areas to encourage its wider uptake.

There are two possibilities to transport hydrogen — shipping and pipelines. In case of the maritime transport, there are two options — liquid organic hydrogen carriers (LOHC) or liquid hydrogen (LH2) carriers.

Back in December 2019, Japanese shipbuilder Kawasaki Heavy Industries launched Suiso Frontier, the world’s first LH2 carrier. It is designed to bring liquefied hydrogen from Australia to Japan and has two 1,250 cbm vacuum-insulated, double-shell-structure liquefied hydrogen storage tanks.

The ship is considered a pilot project, which is primarily intended to shed light on the technical feasibility.

Only when the possible dimensions of such ships and their specific requirements become clearer, countries could design their transshipment facilities more specifically. Hence it will be necessary for the port industry to closely monitor technical developments, according to ZDS.

Governments need to invest more in port infrastructure

By becoming renewable energy hubs, ports can play an important role in the world’s decarbonization challenge, increasing their electricity generating capacity more than tenfold in the next 30 years with the help of offshore wind and hydrogen, a DNV report published in 2020 found.

However, in order for (German) ports to become renewable energy hubs, politicians need to create an environment for the ramp-up of hydrogen technologies, ZDS believes. It will be necessary to make hydrogen competitive with fossil fuels in the future.

The following areas should be promoted more intensively by the public sector:

• Research and development of hydrogen transport options
• Adaptation of the legal framework for handling, using and transporting hydrogen
• Construction of a new infrastructure or upgrading of the existing infrastructure to enable large-scale handling of hydrogen and its derivatives
• Clear, EU-wide framework for the handling and storage of large quantities of hydrogen, ammonia, LOHC and methanol
• Provision of bunker facilities and tank infrastructure to supply ships with hydrogen or hydrogen-based synthesis products as fuel

In order to support port operations, politicians should:

• Promote research and development on the use of hydrogen in heavy equipment and special applications
• Develop a regulatory framework for the use of hydrogen in port operations
• Take into account the special equipment that is used in the port when developing subsidy programs for new acquisitions or conversions of commercial vehicles
• Create funding periods longer, as port equipment usually has a long use-life (approx. 15 years), which is why short funding periods are a hindrance here
• Increase funding quotas for grants for new acquisitions, as these given the large sums that need to be invested are not sufficient
• More attention to the financial support of necessary infrastructure, such as petrol stations at terminals, since port equipment cannot use the public petrol station infrastructure

Furthermore, in the area of production, the possibilities in ports should also be examined in detail. This requires:

• Provision is made in advance for additional areas for the development of new business areas with the parallel development of existing business areas
• Continued existing political support to be expanded for such projects or “test fields”.

In its paper, ZDS reaffirms its expectation that politicians will give more support to the energy transition in the seaports. More needs to be done to locate research and development activities in the seaports and to equip the ports for the trade and use of hydrogen. 

The research and development of transport options for hydrogen should be promoted as well as the promotion of port-bound commercial vehicles and special devices powered by hydrogen.