Batteries outperform hydrogen bulk carriers on modeled Norwegian routes

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Norwegian shipping company GMI Group is moving forward with four hydrogen-electric bulk carriers for coastal shipping. In October 2026, PowerCell confirmed a follow-on order bringing the program to 24 marine fuel cell units with 5.4 MW of combined installed capacity. The first two ships, with a capacity of 4,000 dwt, are planned for 2027, while two additional 3,000-ton vessels are expected in 2029.

The project has real shipbuilding commitments and substantial public support. The question is whether hydrogen makes economic sense for the cargo services these ships will provide.

GMI says its design can deliver lifetime costs 9% to 10% lower than conventional ships. Its argument combines fuel cells, batteries, an efficient hull and wind assistance. These are useful engineering features, but most are not unique to hydrogen propulsion. A diesel or electric boat can have an equally efficient hull and sails. Fuel and power systems have yet to be compared on equivalent terms.

I modeled two hypothetical 3,000 tonne coastal bulk services, covering 80 and 55 nautical miles, using comparable hull performance and operational requirements. Over fifteen years, hydrogen propulsion was 50% to 58% more expensive than conventional diesel, even after assuming that approximately €13.1 million in support for public ships was received in advance. Battery electric alternatives were between €11.64 and €14.13 million cheaper than subsidized hydrogen vessels. These are scenario results, not estimates of GMI’s actual operating contracts.

The company has not published the route or commercial data necessary for a direct evaluation, and the acquisition prices of the model vessels remain significant uncertainties. Battery alternatives were not the cheapest option under all assumptions. In central cases they cost slightly more than diesel in fifteen years. Its advantage was the much smaller difference with conventional operation compared to hydrogen. Battery electric propulsion also requires grid connections, charging equipment and adequate docking times, which cannot be assumed to be available in all Norwegian ports.

Hydrogen has a different set of requirements. Renewable electricity must be converted to hydrogen, compressed, stored, delivered to the ship and converted back to electricity in fuel cells. Those additional processes introduce energy losses and capital costs that efficient hulls and sails cannot erase. They are especially important for short coastal voyages, where it may be possible to reach a practical charging arrangement.

Norway is using significant public funds to support hydrogen ships. Norsk Hydrogenforum reports that Enova awarded a total of approximately €42.9 million for the four vessels. Additional public support has been granted to GreenH hydrogen production projects. Announced subsidies are not necessarily paid in full, and a subsidy changes cost allocation rather than eliminating necessary equipment and energy.

There may be coastal services where journey length, available docking time or network constraints favor hydrogen over batteries. This should be established through commercial and engineering comparisons, rather than inferred from the existence of a funded shipbuilding programme.

Before new public commitments to coastal compressed hydrogen transportation, Norway should require credible offers for electric batteries using ship, cargo and energy prices appropriate to the planned dates of entry into service.

My full assessment of the TFIE Strategy Briefing examines the modeled voyage costs, the reconstructed economics of hydrogen supply, battery size and charging limitations, public subsidies and financial sensitivities that would determine which propulsion system is competitive. Detailed analysis is available to paid subscribers.