Is shipping prepared for the ammonia transition?

Logistics

Ammonia as a marine fuel will require a new infrastructure, demanding national-level involvement. In Singapore, the Energy Market Authority and MPA issued an expression-of-interest (EOI) to build, own and operate low- or zero-carbon power generation and bunkering solutions in Jurong Island.

Through the EOI, the Singapore governmental agencies want to explore the use of hydrogen and ammonia for power generation, alongside other low-carbon alternatives, such as electricity imports and domestic renewable energy sources. Low- or zero-carbon ammonia may also have multiple end-use pathways for power generation and bunkering.

“Ammonia could rapidly become a viable solution in the maritime sector”

MPA chief executive Teo Eng Dih said: “MPA hopes to partner with those who are committed to building up the global supply chain for low- or zero-carbon fuels, including ammonia, with Singapore as a key bunkering hub.” Parties interested in responding to the EOI have until 30 April 2023 to submit their proposals.

In North America, the US Inflation Reduction Act (IRA), introduced in August 2022, set in motion the single largest investment in climate and energy in American history, with US$369Bn in tax incentives for green energy investments. Some companies, like New York-based First Ammonia, have seized the initiative. “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.

First Ammonia’s plants will be pioneering the use of solid oxide electrolyser cell (SOEC) technology, built by Danish manufacturer Topsoe, to produce green ammonia on a commercial scale.

In Europe, Air Products and Mabanaft are participating in a German state project to build the first green ammonia import terminal in Hamburg. 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 2022, there were 90 newbuilding orders for ammonia-ready tonnage”

In another example of state collaboration, this time in Norway, Amon Maritime’s ammonia-powered shipping joint venture, Viridis Bulk Carriers, and its consortium partners, have been 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.

A joint venture between energy trader BGN and Abu Dhabi-listed Al Seer Marine, has purchased two LPG newbuilds and a new LPG/ammonia gas carrier for transporting LPG globally. The Middle Eastern energy transport company joint venture, ABGC DMCC, purchased two 88,000-m³ carriers from South Korea’s Hyundai Samho Heavy Industry (HSHI) and an 86,700-m³ LPG/NH3 carrier from Japan’s Kawasaki Heavy Industries. These Very Large Gas Carriers will all be LPG dual-fuel-powered and are due for delivery in Q4 2025 and Q1 2026.

‘Ammonia-ready’ has become a popular term for newbuildings that have been constructed with a classification society notification of ‘ammonia-ready’. It means the vessel has been constructed with space and facilities in place to be converted to dual-fuel ammonia power. According to Clarksons Research Services, in 2022, there were 90 newbuilding orders across all vessel types for ammonia-ready tonnage, which is equivalent to around 10% of all new contracts placed (7.7M gt).

The tanker fleet is already receiving ammonia-ready vessels. In August 2022, Capital Ship Management Corp received the 300,000-dwt VLCC newbuilding Amore Mio from Hyundai Samho Heavy Industries. This is the first of two ammonia-/LNG-ready VLCCs for the group, with the second, Alterego, delivered in October 2022.