Ocean Network Express Green Hydrogen Strategy: Nor CAL ZERO Pilot, 6 M Tonnes in Market Cancellations, and Fleet Orders (2024-2025)

Maritime Decarbonization Shifts from Hydrogen to Derivatives at Ocean Network Express

In 2025, Ocean Network Express (ONE) is executing a pragmatic decarbonization strategy that prioritizes fuel flexibility and collaborative learning over large-scale commitments to pure green hydrogen. The company’s actions reflect an industry-wide recognition of hydrogen’s persistent cost and infrastructure barriers, leading to a calculated pivot towards its more mature derivatives, green ammonia and green methanol. This approach allows ONE to advance its 2050 net-zero goal while mitigating the significant financial and operational risks associated with a single-fuel pathway in a volatile market.

ONE’s Dual-Fuel Fleet Investment

The core of ONE’s strategy is its investment in assets that provide future optionality. In January 2024, the company confirmed its first order for a fleet of methanol dual-fuel vessels and separately obtained an Approval in Principle (Ai P) for ammonia dual-fueled container ships. These moves are significant because they commit capital to commercially ready technologies while preparing for a zero-carbon future. Rather than waiting for green hydrogen to become viable, ONE is building a fleet that can operate on conventional fuels today but transition to green methanol or ammonia as production scales and bunkering infrastructure becomes available. This contrasts with the strategies of competitors like Hyundai Merchant Marine, which are also investing heavily in methanol capabilities.

The Nor CAL ZERO Project Focus

ONE’s engagement in the Nor CAL ZERO project, announced in May 2025, demonstrates its focus on solving the practical, operational challenges of decarbonization. By taking a leading role in this North American initiative, the company gains direct experience with zero-emission technologies in port and onshore environments. This is a deliberate choice to build expertise in logistics and ground operations, which are critical precursors to vessel-based fuel transitions. The project allows ONE to de-risk its strategy by learning through collaboration, influencing infrastructure development, and understanding the real-world complexities of alternative fuels without committing to hydrogen-powered vessels prematurely.

Cancellations and Cost Headwinds Validate ONE’s Cautious Hydrogen Approach

The broader green hydrogen market experienced significant turbulence in 2025, validating the cautious, risk-averse strategy of maritime operators like Ocean Network Express. High production costs and strategic pivots by developers led to widespread project cancellations, underscoring the immaturity of the hydrogen supply chain. By focusing on flexible, dual-fuel vessels and avoiding direct investment in hydrogen production, ONE has insulated itself from the market’s volatility while retaining the ability to adapt as conditions change.

Hydrogen Market Volatility in 2025

The market correction was a defining feature of 2025. A Rystad Energy report from August 2025 revealed that strategic re-evaluations by developers resulted in the cancellation of projects representing approximately 6 million tonnes per annum of planned low-carbon hydrogen capacity. This significant reduction in future supply highlights the immense uncertainty facing the sector. For capital-intensive industries like shipping, this level of market instability makes large-scale commitments to a single hydrogen pathway untenable. This market environment also affected the plans of other major carriers, including Mediterranean Shipping Company, as projects faced delays across Europe.

The Persistent Cost Barrier

Cost remains the primary obstacle to green hydrogen’s adoption in shipping. A January 2025 analysis pegged the maritime cost of green hydrogen between $3, 500 and $6, 000 per ton, making it the most expensive alternative fuel option. Even with production costs falling in specific regions, such as India reporting costs around $3.5 per kg in September 2025, the global price remains significantly higher than conventional marine fuels and other alternatives like methanol. This economic reality reinforces ONE’s strategic choice to invest in methanol and ammonia-ready vessels, which offer a more viable near-term path to emissions reduction.

Table: Low-Carbon Hydrogen Project Cancellations (2025)

Partnerships as a De-Risking Mechanism for ONE’s Decarbonization Strategy

Ocean Network Express leverages strategic collaborations as a primary tool to navigate the complexities of maritime decarbonization without exposing itself to the full risk of nascent technologies. Instead of direct capital investment in hydrogen production, ONE’s approach involves active participation in research consortia and pilot projects. This strategy allows the company to build operational knowledge, influence developing standards, and stay at the forefront of innovation while relying on partners to advance the underlying technology and infrastructure.

ONE’s Leading Role in Nor CAL ZERO

ONE’s participation as a lead in the Nor CAL ZERO project, announced in May 2025, is a key pillar of its North America-focused Green Strategy. The initiative aims to decarbonize coastal and onshore operations, providing a real-world testbed for zero-emission technologies in a critical market. This hands-on involvement is more valuable than passive observation, as it generates practical data on logistics, safety protocols, and operational efficiency that will inform future fleet and fuel decisions. This project mirrors similar regional efforts, such as those being explored at Klaipėda Port, aimed at building localized clean energy hubs.

Leveraging the GCMD and Joint Venture Structure

Beyond specific projects, ONE’s engagement with organizations like the Global Centre for Maritime Decarbonisation (GCMD) and its unique structure as a joint venture of three major Japanese shipping lines (NYK, MOL, and “K” Line) provide significant strategic advantages. These affiliations offer access to a broad network of research, expertise, and policy influence. For instance, an NYK Group report in January 2025 outlined a strategic outlook on hydrogen that directly informs ONE’s long-term planning. This collaborative framework allows for shared risk and collective learning, which is essential for tackling a challenge as large as the global energy transition in shipping. This model is also employed by other major alliances, including those involving CMA CGM Group.

Table: Key ONE Partnerships and Collaborations

Technology Maturity: Hydrogen’s TRL Gap Defines ONE’s Near-Term Strategy

The readiness of alternative fuel technologies is the deciding factor in near-term maritime investment, and in 2025, a clear gap exists between green hydrogen and its derivatives. While hydrogen holds long-term promise, its application for large-scale maritime propulsion remains in the demonstration phase, with a Technology Readiness Level (TRL) of approximately 7.9. In contrast, dual-fuel engines for methanol and ammonia are commercially available and being ordered by major carriers, including Ocean Network Express. This technological reality dictates ONE’s strategy of investing in what is viable today while preparing for the solutions of tomorrow.

• Prior to 2024, discussions around hydrogen in shipping were more theoretical, focusing on its potential as an ideal zero-emission fuel. The primary challenge was seen as production cost and scale.
• Starting in 2024, ONE translated strategy into action by ordering methanol-dual fuel vessels and securing an Approval in Principle for ammonia-fueled ships. This marked a decisive shift toward investing in commercially mature propulsion systems that use hydrogen-derived fuels.
• In 2025, the industry’s focus solidified around these derivatives. The high cost of pure green hydrogen ($3, 500-$6, 000/ton) and the immaturity of onboard storage and fuel cell systems for large vessels reinforced the logic of prioritizing methanol and ammonia.
• ONE’s strategy is now validated by the market, with competitors like Orient Overseas Container Line and Evergreen Marine also placing significant orders for vessels capable of running on these more mature alternative fuels.

SWOT Analysis for Ocean Network Express’s Hedging Strategy

Ocean Network Express’s decision to hedge its bets on future fuels creates a distinct strategic profile with clear strengths in flexibility and risk mitigation, but also dependencies on external market development. This SWOT analysis, based on activities from 2024 and 2025, evaluates the company’s position within the volatile energy transition.

Table: SWOT Analysis for Ocean Network Express’s Green Fuel Strategy (2024-2025)

Scenario Modeling for Ocean Network Express: IMO 2026 Framework Impact

The single most critical factor shaping Ocean Network Express’s forward strategy is the finalization and implementation of the IMO’s Net-Zero Framework, anticipated by 2026. This regulation will determine the financial and operational viability of different fuel pathways. If the framework includes a robust carbon pricing mechanism, it could rapidly close the cost gap for green fuels, forcing ONE to accelerate its transition from pilot projects to large-scale fuel procurement agreements.

• Watch for the outcomes of the Nor CAL ZERO project. Success or failure in this operational testbed will directly influence ONE’s confidence and strategy for deploying similar technologies in other key regions.
• Monitor new vessel orders from both ONE and its competitors. A continued industry-wide focus on methanol and ammonia dual-fuel vessels would signal a sustained consensus, while a divergence could indicate a fracturing of the market.
• Track the Levelized Cost of Production for green hydrogen and its derivatives. A significant cost reduction below the $3/kg mark, particularly for green ammonia, could trigger the first wave of long-term offtake agreements from major shipping lines.
• Look for the first major bunkering infrastructure projects for green ammonia or methanol to reach a final investment decision (FID) at a major global port like Singapore or Rotterdam. This would be a crucial signal that the supply chain is maturing from concept to reality.

The questions your competitors are already asking

This report covers one angle of Ocean Network Express’s decarbonization trajectory. The questions that matter most depend on your work.

• Maersk and CMA CGM methanol ship orders
• Green ammonia bunkering projects Singapore
• IMO carbon price mechanism shipping
• Green methanol fuel price forecast 2030

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