Ammonia takes centre stage as a clean marine fuel

University of Wisconsin director of the Renewable Energy Program, Michael Reese, said: “NOx is not a big issue, it is the N2O that is the biggest challenge. That is 300 times worse.”

But US-based low-carbon technology firm 8 Rivers Capital’s vice president for ammonia strategy, Brent Novak, is optimistic a solution will emerge by burning ammonia more efficiently to reduce the production of unwanted N2O.

“There are some challenges, especially with N2O emissions. I have talked to some big catalyst suppliers and they are working on that. It is manageable.”

Geopolitical stimulus monies are shaping decisions on new green ammonia plant locations.

The US Inflation Reduction Act (IRA) in August 2022 set in motion the single largest investment in climate and energy in American history, with $369Bn in tax incentives for green energy investments.

The impact of IRA featured prominently in the Phoenix conference executives’ panel discussions, prompting multiple audience questions. Of particular interest to shipping was whether IRA tax credits could significantly lower the price of green hydrogen, which is the main reactant to produce green ammonia. It was thought green hydrogen prices with tax credits could drop to US$2/kg. The US DOE has set the target for the green hydrogen price at US$1/kg by the end of this decade.

New York-based First Ammonia has already acted. “The IRA now trumps all other places to invest,” said its global head of engineering Ralf Schaaf.

“We are now pushing forward with our plants in the US, starting with one of the world’s largest green ammonia production facilities in Texas, with 300 MW capacity as a start, supported by the tax credit,” he said.

This investment driver is attractive to major shipping companies, such as Japan’s Mitsui OSK Lines (MOL). “As long as there is a demand, we will have strong producers here in the US, and with a good subsidy like IRA Section 45Q, we can get at that capacity,” said Mitsui general manager for energy business strategy Shunichiro Shimamura.

Separately, MOL and Mitsui recently announced they had received approval from Class-NK for the design of a large ammonia-powered bulk carrier.

First Ammonia’s plants will be pioneering the use of the solid oxide electrolyser cell (SOEC) technology, built by Danish manufacturer Topsoe, for producing green ammonia on a commercial scale. This technology increases energy efficiency without requiring expensive noble metal catalysts used in other electrolyser types, such as platinum or iridium to generate the electrochemical reaction.

In Europe, a positive environment also exists for German state investment. Air Products and Mabanaft are participating in a project to build the first green ammonia import terminal in Hamburg, supported by German state aid.

“Towards 2050, the majority of the clean ammonia will go to the shipping industry because of the IMO legislation and EU taxation”

From 2026, the terminal will import green ammonia from Saudi Arabia. Air Products will produce the ammonia and distribute it to end users in Germany, mostly for conversion into hydrogen. Mabanaft’s Oiltanking will run the terminal.

In another example of state collaboration in Norway, Amon Maritime’s ammonia-powered shipping joint venture Viridis Bulk Carriers, and its consortium partners, were awarded development funding from the Norwegian Pilot-E programme to build ammonia-powered vessels.

Amon Maritime chief executive Andre Risholm described the company as the world’s first carbon-free shipping company. “We are working both on the infrastructure side for building bunkering terminals and on the ship side as a consumer of ammonia fuel, where we will be an owner/operator ourselves,” he said.

Ammonia as a carrier

Due to its high energy density and storage benefits over liquid hydrogen, ammonia is a potential hydrogen carrier. Liquid hydrogen must be stored at -253˚C, compared to -33˚C for liquid ammonia.

In addition, ammonia is less flammable than hydrogen, making it a safer storage and transport medium for hydrogen, for subsequent use in fuel cells.

The spin-off benefit for shipping traffic is even greater, when adding the ‘ammonia as a carrier’ application, because ammonia will need to be shipped from the producing hot countries to the industrialised cooler countries, who will then reverse the Haber-Bosch process to convert ammonia back into hydrogen for fuel cells to use in industry. 

Canadian clean energy company Fuel Positive chief operating officer Nelson Leite encapsulates the potential. “Ammonia as a carrier is effectively a ‘suitcase molecule’. It is acting like LNG, just burning gas into a different form, ammonia,” he said. “You can crack it back to hydrogen before you use it as a fuel cell for other processes.”

Methanol is also an option for deepsea shipping, as it has a high energy density. Vessels can carry a larger volume of energy in a confined space, rendering both as efficient solutions for shipping.

One of the highlights of the Hamburg Ammonia conference was the paper delivered by Maersk Group head of future fuels Maria Strandesen, who set out Maersk’s evaluation of ammonia as a viable fuel option, in which safety (crew and marine life) and a desire for regulation, both feature strongly.

Maersk, which will only countenance green options, has already placed orders for 19 methanol-fuelled ships and signed letters of intent for delivering 1.5M tonnes of green methanol within the next three to five years. But as Ms Strandesen concluded: “Ammonia is still on the ‘perhaps list’ for us. It is by no means off the table, but we are not yet comfortable enough to order the first pilot vessel to run on ammonia.”

What is now clear is that shipping faces a diverse fuel future. It is not just a case of ammonia versus methanol for deepsea ships. Other credible alternatives include batteries, hydrogen fuel cells and LNG.

Seen through the prism of operators whose business is carrying fee – paying passengers – cruise lines and ferries – different choices are likely to emerge.

Ultimately the choice of green fuel will depend on the availability of feedstock, the global supply chain, the pace of new marine engine technologies, parallel green infrastructure and IMO legislation and production costs.

The Strategy Works will continue to monitor and report on these outcomes at future marine conferences, as the shipping industry evaluates its green options.

Footnotes

Both conferences were held two weeks apart in November 2022

This article was prepared by Michael Herson of London-based The Strategy Works - a strategy insight and value chain consultancy specialising in the marine sector.