Ammonia as a Marine Fuel: Safety and Cost Challenges

By Jeslyn Lerh

SINGAPORE (Reuters) – At one of the world’s biggest bulk export ports in Western Australia, shippers safely completed the first transfer of ammonia from one vessel to another last month, marking a key test for its adoption as a marine fuel in the push for cleaner energy.

The first cargo ships powered by ammonia are set to enter service in 2026, as the industry explores several alternatives to reduce a carbon footprint that accounts for nearly 3% of global emissions.

However, ammonia faces significant cost and safety challenges compared to other fuels, such as liquefied natural gas (LNG), methanol, and biofuels.

Ammonia’s Appeal and Safety Concerns

Ammonia is appealing because it is carbon-free and would be a zero-emission fuel if generated from hydrogen produced using renewable electricity. Nevertheless, significant safety concerns exist, given ammonia's common use in fertilizers and explosives.

"Currently the lack of regulation, experience in use and toxicity of ammonia on board ships constitute major safety deterrents," stated Laure Baratgin, head of commercial operations at mining giant Rio Tinto (NYSE:RIO).

Rio Tinto is the largest exporter at Dampier, where the ammonia transfer trial was conducted. The company operates dual-fuelled bulk ships that run on traditional marine fuel or LNG but have not yet chartered or ordered ammonia-fuelled vessels.

"Pending our confidence and that of our partners, industry, and communities, that the risks are sufficiently controlled, we will look to charter ammonia dual-fuel vessels, the specific timing of which remains uncertain," she told Reuters.

Industry Hesitation

Globally, only 25 ammonia dual-fuel ships have been ordered as of 2024, compared to a fleet of at least 722 LNG-fuelled ships and 62 methanol-fuelled ships. Currently, only two smaller ammonia-fuelled vessels are operational, including a tugboat in Japan.

Dangerous Properties

Bunkering, or refueling ships, poses particular challenges with ammonia due to risks of acute poisoning and damage to the skin, eyes, and respiratory tract. Yoshikazu Urushitani, general manager at Mitsui OSK Lines, highlighted that "the greatest risk is leakage during bunkering operations." A study by the Global Centre for Maritime Decarbonisation (GCMD) identified 400 risks associated with ammonia bunkering that can be mitigated with emergency-release couplings for leak situations.

Guidelines and Future Directions

Japan’s Nippon Yusen Kaisha (NYK), which is constructing the world’s first ammonia-fuelled medium-sized gas carrier, has created specific equipment for ammonia bunkering. The industry requires guidelines for seafarers to safely manage this fuel.

Singapore, the world’s largest ship refueling hub, is evaluating ammonia for power generation and bunkering, developing standards for ammonia bunkering.

Prohibitive Costs

For ammonia to be competitive in bunkering, costs must decrease sharply. Currently, powering ships with ammonia can cost two to four times more than traditional fuels due to limited marine sector supply and lower energy density.

"If you want to travel the same distance, you have to carry about two and a half times that amount of fuel, or you need to bunker more frequently," explained Loo.

Additionally, ammonia engines require more maintenance due to the corrosive nature of the fuel, according to engine manufacturer Wartsila.

Despite these challenges, the American Bureau of Shipping predicts ammonia will account for about one-third of bunkering by 2050. "We certainly won't bring any product to market until we are 100% certain that all risks have been duly managed," stated Kenny MacLean, COO at bunker fuel supplier Peninsula.