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18 November 2021

Green ammonia ships coming next year, says Fortescue

Green shipping will become a reality in just one year, according to the Fortescue Metals Group, which has just unveiled plans to have the world’s first ammonia-powered ship ready by the end of 2022.

The group outlined plans to convert all of its 100 iron ore carrier ships to run on green ammonia “well within this decade.” It will start with a 75-meter offshore supply ship – named MMA Leveque – which it will convert in collaboration with MMA Offshore over the next year. “The vessel will show the shipping industry the power of a vessel fueled by green ammonia in real-world conditions,” according to chairman Andrew Forrest.

The Fortescue Metals Group is undoubtedly the leading force in the nascent development of the global hydrogen economy. Along with the shipping announcement this week, the company also signed a deal with Universal Hydrogen to develop green hydrogen systems for the global aviation sector by 2035, with initial hubs in Iceland, New Zealand, and Australia, and pilot flights from 2022. It also follows a string of announcements for the development huge-scale hydrogen production hubs – most recently a 15 GW development in Argentina.

The company’s interest in maritime decarbonization is central to its plan to achieve net zero Scope 3 emissions by 2040. It’s timeline, however, is significantly ahead of others in the industry. MAN Energy, also hoping to develop the world’s first ammonia-powered ship, only expects its systems to be available from the end of 2024, with the first vessels kitted out with its propulsion system likely entering service in 2025 or 2026.

Currently, the maritime industry – largely due to cargo shipping – is responsible for around 2.5% of global emissions; almost on-par with aviation. Nearly 90% of all container ships are powered by heavy fuel oil, meaning that a single long-haul journey can be responsible for more than 5,000 tons of CO2 being pumped into the atmosphere, along with vast amounts of nitrogen oxide, sulfur oxide, and other particulate matter.

So far, apart from biofuels, there have been very limited options available to those attempting to decarbonize their shipping fleets. Not only has this seen maritime emissions continue to rise over the past 10 years, but it has also seen the sector excluded from early iterations of emissions trading schemes, meaning that its carbon output goes largely unpunished. Some have estimated that shipping emissions could account for as much as 17% of global emissions by 2050, if left unregulated.

As within any type of transport, clean fuel selection depends on energy intensity and utilization – how much energy is required per mile and how often the vehicle is in use – with points of differentiation around cycle costs and recharge time. Current lithium ion battery packs have an energy density of around 260 Wh/kg, with a cycle life of up to 2,000 and a recharge time of around 45 minutes. In contrast, fuel cells run on compressed hydrogen can achieve density values of 2,000 Wh/kg, operating for 15,000 cycles and refueling in under 20 minutes. Converting hydrogen as an energy carrier into ammonia, can push this up to 3,500 Wh per kilogram.

While this is still less than half the energy density of diesel, it is far closer to a value that will be deemed acceptable for onboard storage by shipowners; its volumetric density is broadly similar to that of methanol – another solution some are exploring for decarbonization. Like hydrogen, however, ammonia has the benefit that it does not emit any CO2 when used to power an engine or a fuel cell.

Ammonia is often compared with hydrogen. Both are stored in liquid form, hydrogen requiring cryogenic tanks maintained at -253 degrees Celsius, while ammonia requires less cooling and can be stored at temperatures of around -33 degrees Celsius. Ammonia is manufactured from nitrogen and hydrogen, so for zero carbon ammonia we need ‘green’ hydrogen manufactured using renewable energy.

Today, 80% of ammonia is used for fertilizer production. For ammonia to tackle just 30% of emissions from the maritime sector – a benchmark Rethink Energy expects it to hit in 2040 – global ammonia production will need to double at least. For this to be green, with green hydrogen produced through renewable-powered electrolysis, huge amounts of renewable capacity will need to be deployed by the sector. One benefit, however, is that the use and safety of ammonia within port infrastructure has already been well established by the fertilizer industry.

These decisions need to come now. An average ship has a lifetime of between 25 and 30 years, meaning many that are being sold today will still be in operation by 2050, by which time we will have to be at net zero emissions. While the IMO (International Maritime Organization) continues to remain clueless about decarbonization – hoping to just half emissions between 2008 and 2050, and with no real commitment behind any technology – some laggard fleet owners continue to dither with incremental improvements in fuel efficiency. It is innovators like Fortescue, that embrace fully net-zero solutions, that will reap the rewards of a dramatic maritime transition over the coming decades.

Led by countries like Japan, and as the maritime industry becomes embroiled within carbon taxation through the late 2020s, Rethink Energy expects ammonia will power over 30% of ships by 2040, at which point ammonia-powered vessels will account for nearly three-quarters of all unit sales.

By 2050, 74% of all ships globally will be running on green ammonia, causing a sectoral emission reduction of 55%. Other technologies, including batteries for short-haul shipping, as well as biofuels and methanol, will drive emissions down even further. At this time, the global ammonia market will have quadrupled in size, to a total valuation of $5 trillion.