COPENHAGEN: An analysis from the non-profit Global Maritime Forum on behalf of the Nordic Green Ammonia Powered Ships (NoGAPS) project, says the cost gap between operating ships on zero-emission ammonia and conventional fuel could be eliminated before 2030 and possibly by 2026.

Ammonia is increasingly seen as an important solution for decarbonising the shipping sector, given its high scalability and potential for use on long-distance shipping routes. However ammonia-powered gas carriers remain significantly more expensive to own and operate than conventional-powered gas ships.

The new analysis identifies several methods for responding to the challenge of commercialising early ammonia-powered vessels including dual-fuel vessel design, competitive debt financing arrangements, operational efficiencies, fuel subsidies and governmental regulation.

Combining the benefits of the US Inflation Reduction Act (IRA) and the EU’s Fit for 55 Package, for example, would reduce the cost of owning and operating an ammonia-powered vessel by 20 percent and 10 percent respectively.

According to the report authors, the most effective way to reduce the ammonia cost gap is to “pull on numerous cost-reduction levers simultaneously”. So an ammonia-powered vessel operating between the U.S. Gulf and Northwestern Europe that exclusively bunkers U.S. ammonia, applies Fit for 55 measures and IRA subsidies, and maximises operational efficiencies, could close the power cost gap by 2026 and reach parity with bunker fuel by 2030.

The NoGAPS project brought together representatives of the Nordic shipping and energy value chain including Yara Clean Ammonia, BW Epic Kosan, MAN Energy Solutions, Wärtsilä, DNV, Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, the Global Maritime Forum, the Danish Maritime Authority and Breeze Ship Design.

“The ship design and outline of commercialisation options are important milestones that we believe could contribute to accelerating the acceptance of clean ammonia as a zero-emission fuel,” commented Murali Srinivasan, SVP Commercial, Yara Clean Ammonia.

Established in 2017, the Global Maritime Forum works to create a decarbonised maritime industry that supports sustainable long-term economic development. Funded through a combination of grants and partner contributions it operates independently of individual companies.