Zero-carbon ammonia for shipping faces cost, safety challenges (updated)

Nippon Yusen Kabushiki Kaisha

30/10/2024 10:39

* 
      Ammonia bunkering study finds 400 safety risks 
    

        * 
      Shippers reluctant to order ammonia-fuelled vessels
    

        * 
      Costs are two to four times more than traditional marine
fuels
    

  
 (Updates Oct 28 item with Singapore pilot study; paragraphs
13,14)
    By Jeslyn Lerh
       SINGAPORE, Oct 28 (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, 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, one of several alternatives the industry is
tapping to shrink a carbon footprint that contributes nearly 3%
of global emissions.
    But ammonia faces major cost and safety hurdles as a
shipping fuel compared to liquefied natural gas (LNG), methanol,
and biofuel.
    It appeals because it it carbon-free, and would be a zero
emission fuel if made from hydrogen produced with renewable
electricity. But safety is a big challenge for the product,
typically used for fertilisers and explosives.
    "Currently the lack of regulation, experience in use and
toxicity of ammonia on board ships constitute major safety
deterrents," said Laure Baratgin, head of commercial operations
at mining giant Rio Tinto  RIO.L .
    Top global iron ore producer Rio is the biggest exporter at
Dampier, where the ammonia transfer trial was run. It operates
dual-fuelled bulk ships that run on traditional marine fuel or
LNG, but has yet to charter or order 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.
    Other shippers are also hesitant. Globally, only 25 ammonia
dual-fuel ships have been ordered as of 2024, trailing a fleet
of at least 722 LNG-fuelled ships and 62 methanol-fuelled ships,
including orders and ships already in operation.  
    Just two smaller ammonia-fuelled vessels are now in service,
one of them a tugboat in Japan.
  
    DANGEROUS PROPERTIES 
    Refuelling ships, or bunkering, poses particular challenges
with ammonia, which can cause acute poisoning and damage to the
skin, eyes, and respiratory tract. 
    "The greatest risk is leakage during bunkering operations,"
in addition to leakage from fuel tanks, said Yoshikazu
Urushitani, general manager in the marine fuel division at
Mitsui OSK Lines  9104.T , which is designing an ammonia-powered
bulk carrier.
    A pilot study in Singapore by the Global Centre for Maritime
Decarbonisation (GCMD) identified 400 risks associated with
ammonia bunkering there.
    Measures such as emergency-release couplings to shut down
systems if a leak is detected can mitigate risks, it said.    
    The Centre is developing a detailed emergency response plan
for ammonia spills, which are harder to contain than oil spills.
    "For oil, you see it - it stays there and it spreads out in
water. But ammonia dissipates in air," said Lynn Loo, chief
executive officer of GCMD.
    Japan's Nippon Yusen Kaisha (NYK)  9101.T , which has agreed
to build the world's first ammonia-fuelled medium-sized gas
carrier, has developed equipment specifically for ammonia
bunkering. 
    The industry will need to set guidelines for seafarers to
safely manage the fuel, said Takahiro Rokuroda, general manager
at NYK's Next Generation Fuel Business Group.
    Singapore, the world's largest ship refuelling hub, has
shortlisted companies to study the viability of ammonia for
power generation and bunkering and is developing ammonia
bunkering standards. 
     
    PROHIBITIVE COSTS
    Costs will have to drop sharply to make ammonia competitive
in bunkering. 
    It can cost two to four times more to powering ships with
ammonia rather than conventional fuels, industry figures show,
due to limited supply for the marine sector and an energy
density about 2-1/2 times less than traditional fuel.
    "If you want to travel the same distance, you either have to
carry about 2-1/2 times that amount of fuel, or you have to
bunker more frequently so that you have enough fuel to be able
to make that trip," said Loo.    
    
    Ammonia engines also need extra maintenance as the fuel is
corrosive, says engine maker Wartsila  WRT1V.HE .
    Still, the American Bureau of Shipping forecasts ammonia
will account for about one-third of bunker fuelling by 2050.
    "We certainly won't bring any product to market until we are
100% certain that all risks have been duly managed," said Kenny
MacLean, chief operating officer at bunker fuel supplier
Peninsula.
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Growth of alternative fuel uptake by number of ships    https://tmsnrt.rs/4fdLIWG
Asia bunker fuel prices based on type of fuel    https://tmsnrt.rs/3YkAkkO
FACTBOX-Companies build ammonia-fuelled ships to cut emissions  
  USN:nL4N3LG0FB 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Jeslyn Lerh in Singapore; Additional reporting by
Katya Golubkova in Tokyo; Editing by Tony Munroe and Clarence
Fernandez)
 ((jeslyn.lerh@thomsonreuters.com))