Around 70% of ammonia supply today is used to make fertilisers, with the remainder used for a wide range of industrial applications, such as plastics and synthetic fibres. For shipping companies, however, the fuel promises a different kind of growth.
In April 2018, the International Maritime Organization (IMO) took the unprecedented step of committing the shipping industry to a net-zero target, aiming to eliminate greenhouse gas (GHG) emissions within the century.
The initial IMO 2050 strategy aims to halve GHG emissions from ships by 2050 from a 2008 baseline. It also envisages a reduction in the carbon intensity of international shipping, or to reduce carbon dioxide emissions per transport work, by an international average of at least 40% by 2030 and pursue efforts towards 70% by 2050, against the same baseline.
This strategy is set to be revised and adopted this year, but efforts to improve on this initial target have faced resistance from the organisation’s 32 member states. At last December’s Marine Environment Protection Committee (MEPC 79) meeting, 10 countries voted against increasing the current level of ambition.
Member states have pledged to adopt a revised strategy at MEPC 80, scheduled for July 3 to July 7. They are expected to introduce intermediate GHG reduction targets for 2030 and 2040, in line with global efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
Historically, oil products have constituted over 99% of the total energy for international shipping. Worldwide, the industry represents 2.9% of total GHG emissions.
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In 2021, biofuels met less than 0.5% of the total energy demand from international shipping, according to the International Energy Agency (IEA). “To get on track with [net zero], the penetration of alternative fuels, including biofuels, hydrogen, ammonia and electricity, will need to increase in this sector.”
The ammonia molecule consists of one nitrogen atom and three hydrogen atoms; the molecule has no carbon atom, so it does not emit carbon dioxide during combustion. As a fuel, ammonia has about half the energy density of bunker fuels and takes on a liquid form at -33°C, so it does not have to be stored in high-pressure or cryogenic tanks.
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Ammonia continues to be considered one of the most promising zero-carbon marine fuels, says the Ministry of Trade and Industry (MTI) in a document about Singapore’s National Hydrogen Strategy. “In several projected scenarios, DNV expected ammonia to contribute to a significant proportion of the world’s maritime energy mix to decarbonise the world’s fleet by 2050, while IEA estimated ammonia to meet 45% of international shipping fuel demand to achieve global net zero in 2050.”
Dual-fuelled vessels
By 2030, momentum is expected to build for alternative fuels as companies strive to meet emissions targets, says Ng Baoying, associate director of global strategic engagements and intelligence at S&P Global Commodity Insights. “The issue is the lack of fuel availability and actual main engines for these ammonia and hydrogen dual-fuelled vessels built in the shipyards.”
There are three hydrogen vessels in today’s fleet, says Ng in her presentation at the S&P Global Platts Singapore Commodity Market Insights Forum 2023 on March 28. There is also “a handful” of domestic hydrogen vessels set to be delivered within the cruise, ferries, tug and dredger sectors.
No official dual-fuelled ammonia vessels are on order yet, but over 100 vessels are being built with an ammonia-ready retrofit option, says Ng. “Initially, they will be LNG [liquefied natural gas] dual-fuelled but would have to return to the yard in 2024 to have extensive conversions to use ammonia.”
Ammonia’s current role in power generation is limited to co-firing with coal in a 20% mix; the potential for increased mixing percentages in the future, says Le Minh Khoi, head of global hydrogen research at Oslo-headquartered energy research firm Rystad Energy.
While there are fuel cells that can utilise 100% ammonia, commercially available turbines capable of entirely burning it are not yet accessible, adds Le. “On the other hand, turbines for 100% hydrogen power generation are already available, giving hydrogen a competitive edge.”
Le says it is worth noting that ammonia production requires hydrogen. “Ammonia’s significance also lies in its potential for transporting renewable hydrogen from countries with abundant renewable resources to other regions.”
In March, US sustainable energy startup Amogy announced plans to present its ammonia-powered, “zero-emission” tugboat in late-2023. Amogy is retrofitting a 1957 tugboat that runs on diesel generators and electric motors with its ammonia-to-power system. The technology feeds liquid ammonia through cracking modules to produce hydrogen, fed into a fuel cell to power the ship’s electric motors.
In April, Mainboard-listed Marco Polo Marine signed a memorandum of understanding (MOU) with Amogy to install the proprietary ammonia-to-power system in the company’s existing or newly-built wind vessels. These wind vessels provide accommodations for workers and facilitate wind turbine servicing and repair work.
This follows the listco’s entry into the offshore wind farm market in January 2022 with the acquisition of Taiwan-based PKR Offshore through a joint venture.
S&P’s Ng says inaugural ammonia new builds will hit the water in 2024. “A lot of players [are] watching to see if the [ammonia] bunkering infrastructure can withstand the demand. We could see some trials occur earlier in 2023, but this may be ambitious.”
Ammonia bunkering by end-2023?
One local organisation is gunning to fulfil that ambition. While ammonia-fuelled vessels are not yet available, the Global Centre for Maritime Decarbonisation (GCMD) announced on April 27 plans for the first ship-to-ship transfer of ammonia in Singapore by the end of this year.
Along with the appointed consultant DNV Maritime Advisory, GCMD identified and assessed more than 400 potential risks for conducting ammonia bunkering pilots in the Port of Singapore but found them “low or mitigable”.
The nine-month-long ammonia bunkering safety study, “Safety and Operational Guidelines for Piloting Ammonia Bunkering in Singapore”, was conducted with Surbana Jurong and the Singapore Maritime Academy at Singapore Polytechnic.
GCMD conducted the safety study at Raffles Reserve Anchorage and two undisclosed land-based sites. The study’s findings pave the way for a pilot project at the three identified sites.
Singapore is the world’s largest bunkering hub and second-largest container port. Given the Port of Singapore’s proximity to dense residential areas and operations that see more than 1,000 ships a day, the study’s guidelines will likely apply to piloting ammonia bunkering at ports elsewhere, says GCMD.
Ammonia is highly toxic. At ambient temperature and pressure, it is a corrosive and flammable gas. Despite its toxicity and associated risks, green ammonia is one of the potential fuels that can decarbonise the shipping industry, says GCMD. The report projects that ammonia will make up 10% of all marine fuels bunkered here in 2035.
Meeting goals
GCMD was formed in August 2021 with a $120 million fund from the Maritime and Port Authority of Singapore (MPA) and six founding partners — BHP, BW, DNV Foundation, Eastern Pacific Shipping, Ocean Network Express and Sembcorp Marine.
Based in Singapore, the non-profit organisation supports decarbonising the maritime industry to meet or exceed the IMO’s goals for 2030 and 2050.
GCMD CEO Lynn Loo says: “This report will inform and enable a GCMD pilot involving the ship-to-ship transfer of ammonia in the port waters of Singapore. We aim for the first ammonia transfer to occur by the end of 2023, subject to obtaining the green light from the relevant regulatory agencies.”
“Since ammonia-fuelled vessels are not yet available, we will conduct the pilot with proxy assets to gain stakeholder competence and confidence so an actual bunkering exercise can commence when ammonia-fuelled vessels are on the water.”
‘Unrealistic’
Not everyone shares that optimism; the MPA issued a rebuke four days later. The port authority’s May 1 statement reads: “Recent media posts and reports suggested that Singapore was ready to conduct the first transfer of ammonia in Singapore’s port waters before end-2023… These views do not represent the assessment of MPA and other government agencies — the timeline before the end of 2023 is unrealistic.”
Recent media posts and reports suggested that Singapore was ready to conduct the first transfer of ammonia in Singapore’s port waters before end-2023… These views do not represent the assessment of MPA and other government agencies — the timeline before the end of 2023 is unrealistic.- Maritime and Port Authority of Singapore
MPA says it welcomes studies, pilots, and collaborations contributing to the maritime sector’s decarbonisation efforts. “These efforts must, however, be accompanied by thorough validation of the studies, calibration of models to assess the impact of incidents, and rigorous procedures to ensure the safety of the port, port community and ship crew.”
The port authority has another reason to protest — GCMD’s report was released just a day after a deadline for would-be operators to submit an expression of interest (EOI) for a related project. MPA says the report’s timeline should not prejudge the outcome of its EOI process, launched in December 2022 with the Energy Market Authority (EMA) of Singapore, to seek parties to build, own and operate low or zero-carbon hydrogen and ammonia bunkering facilities on Jurong Island.
Two weeks after the report’s release, Loo appeared to walk back some of the report’s claims via LinkedIn. In a May 14 post to her page, she describes the differences between ammonia bunkering and ammonia transfer, noting that “ammonia bunkering guidelines don’t exist today” and “ammonia bunkering will not happen today, or tomorrow, or the end of the year”.
She adds: “[Ammonia] bunkering occurs in port waters, close to population densities. It happens near other ships and related activities. Safety assessments must be done; emergency response protocols developed [and] crew training undertaken for ammonia bunkering to happen.”
After the MPA’s statement, Surbana Jurong pulled out of a scheduled interview with The Edge Singapore. Instead, the company issued a statement on May 5: “Surbana Jurong embraces the varied challenges in developing alternative energy solutions and continues working with MPA and its partners to explore low- or zero-carbon fuels to support the maritime sector’s energy transition. Safety will always be a primary prerequisite to accelerating maritime decarbonisation. Comprehensive R&D, feasibility studies, ample testing and specialised engineering are essential to supporting the adoption of new low-carbon fuels, including ammonia.”
While the GCMD’s official LinkedIn page has not commented on the report since its launch, Loo has been tempering expectations in posts to her 18,000 followers.
“What is this report not about? This report does not outline conditions for commercial bunkering of ammonia. Much needs to be done before that can happen,” says Loo in a May 8 post. “Why, then, conduct this study? Before this study, we did not know whether, where or how ammonia bunkering [could] take place. If we believe commercial bunkering of ammonia may happen one day, we need to figure out how to do the first transfer. We need to do so now because learning takes time. Confidence building takes time. This study is a small and deliberate step towards so.”
While Loo has not commented on the MPA’s statement directly, a May 11 post reads: “My priority is to help the sector transition as quickly as practicable, and in so doing bend the emissions curve… Does this mean we are going to make some stakeholders gawk? Probably. Does this mean we are going to make some regulators uncomfortable? Most likely. By definition, we are trying to operationalise things never done before. We are challenging the status quo. This is what it takes to move the needle.”
Does this mean we are going to make some stakeholders gawk? Probably. Does this mean we are going to make some regulators uncomfortable? Most likely. By definition, we are trying to operationalise things never done before. We are challenging the status quo. This is what it takes to move the needle.- Lynn Loo, CEO of the Global Centre for Maritime Decarbonisation
CEOs weigh in
Weaning the maritime industry off of fossil fuels will upend existing relationships, says Christopher Wiernicki, chairman, president and CEO of the American Bureau of Shipping (ABS). “New relationships — government to government, government to industry, charters to owners and ships to ports; many new things are coming together.”
Speaking on a CEO panel at Singapore Maritime Week 2023 on April 27, Wiernicki points to the “misperception” that decarbonisation strategies are forming just a part of maritime players’ business plans. “They are, in fact, the business plan.”
Instead of a first-mover advantage, maritime players face a first-mover disadvantage when it comes to decarbonisation, says fellow panellist Rajalingam Subramaniam, president and group CEO of maritime energy solutions provider MISC Group. This may lead to some animosity and frustration.
“In the decarbonisation journey, the enemy is not the commodity; the enemy is emissions,” adds the former seagoing officer. “It’s a very distorted transition at the moment. We have the regulators; we have the financial [institutions]; we have the shipbuilders; we have the engine makers, for example. But a lot of that risk is being taken by the shipowners investing in that technology.”
Financial institutions should do more to bridge this funding gap, he adds. “Financial institutions need to be a bigger piece of this solution… If we want to collaborate purposefully, we shouldn’t be hiding behind these curtains [and asking:] ‘At the end of the day, what are my returns on investment?’”
Future fuels
Maersk Tankers CEO Christian Ingerslev thinks the best solution will naturally emerge. “The best way forward for us to solve the decarbonisation challenge is to let market forces due with it. Companies are rational; they will do the right thing if you create the structures that allow them to do the right thing. So, we need to ensure that the incentives are in place, that we have the right regulatory framework and carbon pricing; and that we have transparency.”
The best way forward for us to solve the decarbonisation challenge is to let market forces due with it. Companies are rational; they will do the right thing if you create the structures that allow them to do the right thing.- Christian Ingerslev, CEO of Maersk Tankers
Still, today’s market may need a rebalancing tool to reach that equilibrium. “Bring on the carbon tax!” says MISC’s Subramaniam to cheers and applause at the panel’s closing. “I know representatives and regulators are here. The world will be a better, level playing field where we will get away from the talking about first-mover disadvantage; bring on the carbon tax, and the world will be a better place.”
The EOI that closed on April 30 was launched to develop a facility that can generate at least 50 megawatts (MW) of electricity from imported low- or zero-carbon ammonia for an operational period of up to 25 years, in addition to supporting ammonia bunkering.
Keppel Infrastructure and ExxonMobil Asia-Pacific have thrown their hat into the ring, signing an MOU in April to enter the EOI.
Could the maritime sector pave the way for alternative fuels in national power grids?
According to MTI’s October 2022 document detailing Singapore’s National Hydrogen Strategy, small-scale direct ammonia-fuelled power generation gas turbines are expected to be commercially available by the middle of this decade. “As it is a new technology, its operating parameters and protocols will need to be established, and its safety and efficiency ascertained for Singapore’s context.”
Cracking technology
Ammonia molecules can be cracked into hydrogen and combusted in power generation gas turbines. Today, gas turbines that can take hydrogen at a 30% to 50% blend with natural gas are already commercially available, and gas turbines that can burn 100% hydrogen are expected to be available by around 2030.
The key technological uncertainty for this pathway is ammonia cracking, says MTI. “While the cracking technology already exists and has been used for some time, it is typically deployed at a smaller scale for niche applications, such as heavy water production. Using ammonia as a hydrogen carrier for power generation at the national level requires cracking technology to improve in scale and efficiency.”
Japan is taking a shot at this. The country received its first low-carbon ammonia cargo from Saudi Arabia in April, which it plans to use for co-firing with fossil fuels to reduce carbon emissions.
Japan wants to add hydrogen and ammonia to its energy mix, though the infrastructure required is still relatively immature. Its largest power generator JERA has been co-firing ammonia with coal in a trial at its power station in central Japan since 2021.
With the import as a start, Japan aims to boost its fuel ammonia demand to three million tonnes annually by 2030.
Closer to home, Keppel Infrastructure signed an MOU with India’s Greenko Group in October 2022 to jointly explore opportunities with green ammonia and renewable energies.
Both companies agreed to explore the feasibility of jointly developing a production facility to produce at least 250,000 tonnes of green ammonia annually.
They will also identify and evaluate a portfolio of solar and wind energy projects, up to an installed capacity of about 1.3 gigawatts (GW), that can power the production facility.
“Green ammonia, as a carbon-free fuel, and an energy storage medium, as well as a transportation vector for hydrogen, has the potential to play a pivotal role in the decarbonisation of the energy and heavy industry sectors,” says Keppel Infrastructure CEO Cindy Lim.
Ammonia has emerged as a viable option for carrying hydrogen, as it possesses low reactivity and can be efficiently converted into hydrogen through on-site catalytic processes, says Oddmund Føre, head of shipping and offshore at Rystad Energy. “Moreover, the transportation and storage of ammonia can be more cost-effective and efficient than hydrogen.”
He adds that hydrogen and ammonia will likely coexist, contributing to the transition towards a carbon-free economy. But using ammonia as a fuel still faces limitations and research challenges. “These include lower burning velocities compared to conventional fuels, higher energy requirements for ignition, and the emission of nitrogen oxides during combustion.”
Føre thinks GCMD’s end-2023 target for a transfer of ammonia here is “quite ambitious”, “considering the current calendar year and the MPA’s indication that it is unlikely to occur”. “Therefore, if this project materialises within the stated timeline, it would hold significant importance and generate substantial interest.”
Port authorities are eyeing these developments closely. Rotterdam, for instance, has plans to conduct a trial on bunker ammonia in 2024 and aims to have operational capabilities by 2026.
Fuel bunker network
Meanwhile, in collaboration with Azane Fuel Solutions, Norwegian chemical company Yara International is set to offer green ammonia to Scandinavian shipping customers through a network of 15 floating terminals. This fuel bunker network is projected to be operational by 2024.
The choice between ammonia and hydrogen as the go-to alternative fuel depends on various factors, such as the proximity of hydrogen production to power stations and the logistical feasibility in different regions, says Ted Toth, partner of power and energy at consulting firm ERM.
“Early-stage winners will likely be locations where hydrogen can be produced close to the power stations. Singapore, for instance, is well-positioned to be a winner in this regard, and Thailand may also benefit due to its centralised oil, gas and petrochemical industry,” says Toth. “On the other hand, countries like Vietnam, with dispersed facilities, face logistical challenges in adopting hydrogen as a fuel.”
In the initial stages, blending hydrogen with natural gas is a practical approach, says Toth, given the limitations imposed by gas turbine manufacturers. “Manufacturers have confirmed that their turbines can effectively burn blends of up to 30% hydrogen with natural gas. While it may be argued that natural gas is still being burned, it’s important to recognise that this blending process represents a transition towards a greener energy mix.”
He adds that this is a significant commitment that should be commended, even if it is not a complete shift to 100% hydrogen usage. “Transitioning from zero to 30% hydrogen entails substantial costs, and it is essential to appreciate the progress being made rather than focus solely on the remaining challenges.”
The next phase of the transition involves addressing how to reach 100% hydrogen usage. “Existing infrastructure, including piping and valves, would require modifications to accommodate the shift to 100% hydrogen usage,” says Toth.
Finally, the question of who bears the cost of these infrastructure changes arises.
“It could be the government, the power companies or the power users themselves,” Toth adds. “Electricity prices would likely increase, with consumers shouldering the financial burden through government taxes or higher rates from power companies.”
Photos: Maritime and Port Authority, Lynn Loo/LinkedIn, ERM, Rystad Energy
Infographics: S&P Global Commodity Insights, Global Centre for Maritime Decarbonisation
