Ammonia-Powered Gas Carriers Poised for Strong Competition by 2026

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A study conducted by the Global Maritime Forum (GMF) has found that cost reduction measures, such as the US Inflation Reduction Act (IRA) and the EU’s Fit for 55 Package, could significantly reduce the cost of owning and operating a gas carrier. According to the study, these measures could cut costs by 20% and 10% respectively. Additionally, the study suggests that other measures such as dual-fuel ship design, competitive debt financing arrangements, operational efficiencies, fuel subsidies, and governmental regulation could further narrow the cost gap.

The study, conducted as part of the Nordic Green Ammonia Powered Ships (NoGAPS) project, assessed ways to bridge the cost gap between operating a ship on ammonia and conventional fuel. The researchers assumed that the ship, called MS NoGAPS, would operate on a route between the US Gulf and northwestern Europe. By maximizing operational efficiencies, exclusively taking ammonia bunkers on board in the US, and utilizing the Fit for 55 measures and IRA subsidies, the study found that the ship’s operation could reach cost parity by 2030. With other cost reduction measures, this could be achieved as soon as 2026.

Jesse Fahnestock, Global Maritime Forum Project Director, expressed optimism about the progress made through the NoGAPS project, stating that it not only resulted in a detailed ship design but also provided a feasible pathway for commercialization. The project involves several industry leaders, including Global Maritime Forum, Yara Clean Ammonia, BW Epic Kosan, MAN Energy Solutions, Wärtsilä, DNV, and the Mærsk McKinney Møller Center for Zero Carbon Shipping.

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