Cost Gap between Ammonia and Conventional Fuel for Shipping Could Close by 2026, Study Finds
A new analysis from the Global Maritime Forum has found that the cost gap between operating ships on zero-emission ammonia and conventional fuel could be closed before 2030 and possibly as early as 2026.
Ammonia has emerged as a promising alternative fuel for decarbonizing the shipping sector due to its scalability and potential for long-distance routes, but currently ammonia-powered gas carriers are more expensive to own and operate than conventional gas carriers.
As part of the Nordic Green Ammonia Powered Ships (NoGAPS) project, co-funded by Nordic Innovation, a new study from the Global Maritime Forum explores options for addressing cost concerns.
The analysis looked at the pathways for commercializing early ammonia-powered vessels, such as the M/S NoGAPS, an ammonia-powered gas carrier designed to operate between the US Gulf and Northwestern Europe. The gas carrier was recently awarded Approval in Principle from DNV. The analysis found several measures that could significantly reduce the current cost delta between ammonia and conventional fuel and reduce commercial risks for it and similar projects.
“Since 2020, the NoGAPS project has brought together key industry leaders to progress an ammonia-powered gas tanker concept towards real-world implementation,” says Jesse Fahnestock, Project Director, Global Maritime Forum. “With the completion of this latest project phase, we not only have a detailed ship design that could be used for a shipyard tender but also a feasible commercialization pathways. We hope this boosts confidence amongst charter parties and investors to take steps towards the realisation of M/S NoGAPS and other ammonia-powered vessels.”
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