A stochastic techno-economic framework for hydrogen-based maritime decarbonisation under market and policy uncertainty

Abstract

Maritime decarbonisation pathways are subject to substantial uncertainty arising from volatile fuel markets and evolving regulatory frameworks. This study develops a stochastic techno-economic framework to evaluate the lifecycle cost competitiveness of hydrogen-based propulsion systems under combined market and policy uncertainty. The framework integrates Monte Carlo-based stochastic price uncertainty with scenario-conditioned policy uncertainty, capturing variability in key cost drivers including CAPEX, fuel price, CO2 value, EU ETS, FuelEU Maritime, and IMO GFI mechanisms. Two hydrogen pathways, namely onboard hydrogen production using steam methane reforming with carbon capture (HPU) and green hydrogen bunkering (Green H2), are assessed against a conventional oil-fuelled reference ship (RefShip) over the 2030–2050 period. Results show that HPU exhibits strong policy sensitivity and becomes increasingly competitive under supportive policy conditions, whereas Green H2 competitiveness remains constrained by hydrogen fuel cost. The median net lifecycle cost ratio relative to RefShip, R, is in the range 0.24–0.68 for the hydrogen pathways. Excluding FuelEU Maritime and IMO GFI surplus-credit revenues increases the median gross cost ratio to R = 0.65–0.90 for HPU and approximately R = ~0.8 for Green H2. While HPU retains only a small probability of exceeding RefShip costs under Conservative and Moderate policy scenarios, this probability becomes negligible under Optimistic and Policy-Optimal scenarios. Green H2, however, maintains probability of being more expensive than RefShip across all policy scenarios due to the dominant contribution of hydrogen fuel expenditure. Threshold analysis demonstrates that both pathways remain economically favourable relative to RefShip at EUA prices below ~100 €/tCO 2 , hydrogen price below ~$5.8/kg H 2 , and CO2 offloading costs below ~$300/tCO 2 . The results demonstrate the importance of stochastic assessment for capturing long-term investment risk and policy uncertainty, highlighting the value of the proposed framework for risk-informed maritime decarbonisation planning.