Green ammonia shipping: Adapting established value-chains to fuel the future of clean maritime transport: A qualitative market study focusing on the barriers and facilitators of green ammonia as a clean fuel in the proposed hydrogen economy.

Abstract

In this paper, through semi-structured interviews, we have conducted a qualitative study to understand key challenges and drivers to implementing green ammonia as a fuel alternative for the shipping sector. Low and zero carbon fuels are seen as the only way to reduce emissions from shipping past 20% to reach the goals set by governmental bodies such as the IMO, EU and Norwegian government. We find that green ammonia offers an attractive solution to longer distance shipping in short, mid and deep-sea shipping where other technologies such as battery no longer remain an option. However, we also find that the technology is significantly more expensive than current MGO propulsion and while the proposed technology builds on existing ammonia networks and internal combustion engines, modifications are needed at all levels of the supply chain. The main cost is related to the fuel costs, and they are expected to decrease with efficiency improvements in green ammonia production. The possibility to use blue ammonia also aids as a transitionary step. Through interviews with producers of green ammonia, engine manufacturers and ship owners and operators, we find that actors view the level of risk in this sector as high, but also promising. To address this, partnerships are used to share risk and ensure all steps in the supply chain can be delivered. While the product is more expensive without market-based mechanisms to support green ammonia, certain niches, known as green corridors, where ammonia shipping is expected to first set sail also exist. Government projects, ammonia shipping vessels, offshore service vessels and shipping of products with high environmental focus are all markets where ammonia shipping is expected to be a thriving fuel alternative. This is because although ammonia could add anything from 200-800% additional cost to shipping, the percentage cost of green ammonia shipping on final retail price is expected to be 1.3% higher.