Yara Eyde is the world's first ammonia-powered ship. Image: Yara.
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- Establishing clean ammonia value chains has become a central focus in hard-to-abate industries such as agriculture and shipping.
- Yara Eyde, the world's first clean ammonia-powered container ship, showcases ammonia's potential as a viable zero-emission fuel for shipping.
- Two of the biggest barriers are to achieve cost-parity between clean and grey ammonia and to align the demand and supply for low-carbon solutions.
The world is closing in on 2030, and action is required to meet the objectives of the Paris Agreement. UN Secretary-General António Guterres stated in an address to the UN General Assembly on 20 September 2023, “We can – and we must turn up the tempo.”
Establishing clean value chains in hard-to-abate industries, such as agriculture and shipping, is one way to decarbonize them. Hydrogen is a key element in decarbonization processes, and clean ammonia is a superior hydrogen carrier.
What is clean ammonia?
Clean ammonia has the potential to become the preferred fuel of the future. As a carbon-free molecule, it doesn't release any CO2 or other greenhouse gases (GHG) when burned. It can be utilized as a fuel in engines or as a feedstock for producing other sustainable fuels. Ammonia is a better option for long-distance transportation than hydrogen because of its higher energy density and the fact that it can be transported in liquid form at -33°C. After transportation, clean ammonia can be converted back into hydrogen, making it a promising solution for the hydrogen economy.
Two forms of ammonia are possible to produce: blue and green. The production of blue ammonia involves utilizing carbon capture, utilization, and storage technology to capture and store up to 95% of the CO2 generated during underground production, like green ammonia.
Generating green ammonia involves using electricity to split water molecules (H2O) into hydrogen and oxygen, known as water electrolysis. If produced correctly, green ammonia can have 99% lower CO2 emissions than conventional grey ammonia (i.e. ammonia produced with natural gas).
Both blue and green ammonia have the potential to significantly reduce carbon emissions and play a key role in the transition to a sustainable low-carbon economy.
Why are clean value chains so important?
Clean value chains are critical for reducing environmental impacts such as GHG emissions, pollution, and resource depletion. By promoting sustainable production and consumption practices, as well as reducing waste and increasing efficiency throughout the supply chain, clean value chains can significantly contribute to combating climate change and preserving ecosystems. However, it's important to note that while green hydrogen is a promising solution for decarbonization, it cannot tackle this challenge alone.
Generating renewable electricity and building infrastructure, both in Europe and globally, is also necessary to support clean value chains and make green hydrogen a viable solution for reducing environmental impacts. These chains are a vital tool for risk management, as they prepare the shipping industry to meet evolving regulatory standards and consumer expectations, enhancing their resilience and competitive advantage in a rapidly changing global market.
What could the impact of these shifts be?
In the context of the shipping industry, clean value chains can be supported by the transition to green marine fuels such as ammonia. The shift towards adopting ammonia as a green marine fuel can bring about significant positive changes in sustainability and decarbonization. Established safety frameworks, ongoing enhancements in regulations, and safety standards are some solutions available to make the widespread adoption of ammonia as a green fuel more viable. Ensuring safety remains a top priority, and these measures can help mitigate safety risks associated with using ammonia.
Moreover, technological advancements, global policy developments, financial incentives, and green shipping corridors can support the transition to clean fuels and enable efficient ammonia-to-power systems. These solutions can help address some of the challenges associated with transitioning to ammonia as a green marine fuel.
Furthermore, the world’s first ammonia powered container ship is set to operate between Norway and Germany from 2026, providing a great example of ammonia’s potential as a sustainable fuel. This development highlights the growing interest and investment in ammonia as a green fuel, and the possibility of this fuel contributing to a more sustainable future.
How is the World Economic Forum facilitating the transition to clean energy?
What stands in the way of this transition?
The transition towards clean value chains often faces significant challenges, such as the need for adequate funding from both public and private sources. To overcome these funding barriers, financial support schemes that can attract investments are required. Authorities and industry associations should work together to develop suitable incentive mechanisms for each value chain. National and international funding along with private capital are necessary to attract investments required to decarbonize industries and transport.
What progress is already in place?
Ammonia has been around for more than a century. Global distribution and infrastructure are already in place to accelerate emerging markets and unlock the barriers to the hydrogen economy in midstream and downstream operations that enable the delivery of clean ammonia to ships. This is pivotal for the maritime industry's shift towards more sustainable fuel alternatives.
In this transition, partnerships are crucial, both on the supply and demand sides. The shift to clean ammonia requires a collaborative approach to mitigate investment risks and seek supply chain efficiencies.
However, the uncertainties in demand present a significant challenge, requiring a balance between the cost of clean fuel and the operational costs of ammonia-powered ships. Regulatory policies and incentives are essential to make clean ammonia cost competitive. Within the next decade, blue ammonia with high capture rates is expected to become cost-competitive with grey ammonia. Due to high capital expenditure and technological efficiency issues, green ammonia will require initial support.
But the benefits will far exceed these initial investments by helping to avoid a climate catastrophe and create future-proof jobs.
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The views expressed in this article are those of the author alone and not the World Economic Forum.
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