Japanese companies with ammonia interests have advanced plans to use ammonia as a marine fuel and to develop the associated infrastructure
The webinar covered the development of ammonia as a marine fuel in Asia with NYK Line and ITOCHU Corporation providing detail on the progress of their projects which are at a relatively advanced stage.
In a survey, only 36% thought their own organisation’s projects testing, piloting and demonstrating zero-emissions shipping technologies were very active. Somewhat active was given by 45% and 19% as not active.
Setting the scene, Global Maritime Forum project director Jesse Fahnestock explained how the Global Maritime Forum is the manager of the Getting to Zero coalition, which was launched in 2018 and has a membership of over 140 companies. The ambition of the Getting to Zero Coalition is to have a commercially viable zero-emissions vessel operating on deepsea routes by 2030, supported by the necessary infrastructure for scalable net-zero carbon energy sources including production, distribution, storage and bunkering.
One of the areas the Global Maritime Forum is concentrating on is providing support for first movers and catalysing projects with member organisations. There are now over 100 projects focusing on zero-emissions pathways for the maritime industry.
Mr Fahnestock said, “Geographically, the most activity that we have found is happening in Europe, which may be the bias in our research methodology, but we believe we are expanding the scope significantly.” Over time, more projects are being unveiled in Asia, and the region is making a significant contribution to the zero-emissions goal.
Global Maritime Forum has noticed a significant trend among large ship projects (over 5,000 dwt) for the uptake of ammonia. “This includes four large-scale ammonia projects added in the space of half a year,” said Mr Fahnestock.
Looking at the small ship category (below 5,000 dwt), projects tend to involve hydrogen, battery or a combination. On the fuel production side, projects are likely to be based on hydrogen, followed by ammonia, methanol and ethanol.
“Looking specifically at Asia, there is a strong focus on technology (80%),” said Mr Fahnestock, “compared to 60% in Europe.”
In a survey, zero-emissions fuels were seen as where Asia could have the biggest impact (40%), followed by shipbuilding (34%). Ports and infrastructure made up the remainder (26%).
He noted that in Asia, ammonia is the most common fuel. “(Asia) is becoming a leading geography for ammonia-powered projects,” said Mr Fahnestock.
NYK Line senior general manager of the Green Business Group Tsutomu Yokoyama gave NYK’s views on projects using ammonia as a marine fuel for a zero-emissions vessel. Ammonia or any form of carbon-reduction project would have a huge impact on NYK Line, which is one of the largest shipping and logistics companies with 784 vessels, eight Jumbo 747 air freight aircraft, terminals in 21 ports and sea, land and air logistics centres covering 3.1M m2 in 609 locations.
NYK Line’s Green Business Group is focused on hydrogen, ammonia, offshore wind, and LNG bunkering projects. “In the future, this will include ammonia bunkering as well,” said Mr Yokoyama. NYK Line Green Business Group’s view is that by the 2030s, small boats, pleasure craft and small ferries with be using batteries and hydrogen fuel cells and there will be a crossover between hydrogen fuel combustion engines for medium-sized vessels with an emphasis on ammonia combustion engines on larger vessels.
“We have not reached a conclusion yet, but our assumption is that oceangoing vessels will be powered by ammonia,” said Mr Yokoyama, “Our strategy at the Green Business Group is to participate in the entire value chain (of ammonia), including production, transportation and bunkering of ammonia.”
In a survey: What is the fuel of the future for deepsea vessels? The majority (37%) chose ammonia, followed by hydrogen (24%), LNG (19%), methanol (14%), biofuel (4%) and LPG (2%).
NYK Line is involved in three ammonia as a marine fuel projects. One is A-Tug, an ammonia-fuelled tug in development with IHI Power Systems, N/GATA and ClassNK.
The second is AFAGC, and ammonia-fuelled ammonia gas carrier – a very specific purpose vessel – in conjunction with Nihon Shipyard and ClassNK. The final project is an ammonia floating storage and regasification barge for power generation.
“We plan to work through three steps. The first step is to build an ammonia-fuelled tug. Based on this experience, step two will be the ammonia-fuelled ammonia gas carrier. The point of this step is this vessel does not need a fuel supply chain – the cargo is ammonia. Step three is to build an ammonia-powered dry bulk carrier or tanker and develop the ammonia bunkering vessel.”
In a poll, 33% felt that tankers should be the first candidate for a zero-emissions ship, with containers scoring a very close 31%. Bulk carriers were in third place with 18% and others were also 18%.
ITOCHU Corporation is developing ammonia as a marine fuel within the corporation. Its marine department project leader, integrated project for development of NH3 fuel ship Takeo Akamatsu said, “We have access to the different business groups: integration is a key part of the ammonia project.”
A memorandum of understanding has been signed between ITOCHU Corporation and partners including ClassNK, Nihon Shipyard, Mitsui E&S, MAN ES and ITOCHU internal partners for bunkering, ammonia production and shipping.
A bunkering partner in Singapore has already been named, Vopak, and in Japan (UBE Industries) and a key issue in the discussions with the local authorities has been safety, noted Mr Akamatsu. Depending on shipper demand, ITOCHU will commence with a pilot project of 10 bulk carriers or tankers. “We expect the first vessel with an ammonia engine will be ready in 2025,” said Mr Akamatsu, “assuming the engine is ready in 2024, subject to rules and regulations.”
One concern ITOCHU Corporation has is the level of CO2 from producing ammonia. A target has been set to less than one tonne of CO2 created per one tonne of ammonia produced – effectively blue ammonia.
NYK Line and ITOCHU Corporation are clearly first movers when it comes to developing projects with ammonia as a marine fuel. In a poll, only 30% felt their own organisation’s outlook was that of a first mover. 39% chose second mover and 19% as third mover with the remainder (12%) as other.
Mr Akamatsu also noted that a pricing mechanism has to be created for ammonia. Last, but not least, there has to be demand from the end users and charterers for a low-emissions vessel. “That is a key issue,” said Mr Akamatsu, “and there needs to incentives. Cost and regulation are key for decarbonisation.”
On the crucial issue of cost and premium, a survey asked, Is the industry willing to pay a 20% premium on new vessels and double present fuel costs to achieve zero-emissions shipping? A resounding 79% replied no, with only 21% in the positive.