July 30, 2025
Allianz has released the “Hydrogen: opportunities, uses and risks in the energy transition” report highlighting how the fuel is emerging as a key player in the energy transition, offering solutions for renewables, hard-to-abate industries and transport.
According to the report, hydrogen is predicted to play a leading role in the energy transition towards a low-carbon economy. As an alternative to fossil fuels, hydrogen solutions can help to tackle climate change in the future, helping many industries towards reducing their emissions.
While hydrogen offers clear benefits, the potential size and scope of the hydrogen economy will depend on a wide range of factors, including geopolitics, infrastructure development, policy and regulation, and, of course, the cost, relative to other sustainable alternatives. Hydrogen’s unique properties also bring challenging risks and hazards – notably fire, explosion and embrittlement – that will require stringent adherence to risk management and loss prevention to ensure safe operation.
Hydrogen: a sustainable fuel of the future?
The energy transition is predicted to see hydrogen demand grow fivefold by 2050, while supply could shift to 60% clean production by 2035 from nearly 100% gray hydrogen currently. The number of planned clean hydrogen projects increased to 1,572 in 2024 from just 228 projects in 2021, according to the Hydrogen Council. The energy transition could also see hydrogen play an important role in facilitating the growth and integration of the renewable energy sector.
Credit: Allianz
Moreover, green hydrogen could also help decarbonize hard to abate industries where other renewable alternatives might be unfeasible or more expensive. There are potential uses for green hydrogen in long-distance transport, including trucks, trains, aircraft and shipping. It can also help decarbonize heavy industry and industrial processes such as the manufacturing of steel, aluminum and cement. Hydrogen technology is also being explored to decarbonize plant and machinery in sectors like construction and mining.
However, even though hydrogen-fueled vessels are not yet widely available, the industry has made progress in testing these. Norwegian ferry company Torghatten Nord has ordered two hydrogen-powered vessels due to be delivered in 2026.
Last year, Holland Shipyards completed its second hydrogen-powered container vessel, H2 Barge 220, which will operate on the Rhine between Rotterdam, the Netherlands, and Duisberg, Germany. Another hydrogen-powered inland vessel, Zulu 0621, was trialed by French shipping company Sogestran Group in 2024.
However, in shipping, adapting engines for hydrogen is accompanied by the risk of machinery breakdown and the potential for safety issues, including embrittlement, gas leaks, and explosions. Port operators, bunkering facilities, and fuel handlers will need to manage highly flammable and cryogenic hydrogen fuels, which bring accident and contamination risks.
The adaptation of hydrogen in shipping will introduce new risks for marine insurers. Modifying engines for hydrogen could raise the chances of machinery breakdown and safety issues.
