Cost Gap Between Ammonia and Conventional Fuel for Ships Could Narrow by 2026, Analysis Finds

Rendering of the M/S NoGAPS ammonia-powered gas carrier. Image courtesy Breeze Ship Design.
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A new analysis by the Global Maritime Forum suggests that the cost difference between using zero-emission ammonia and conventional fuel for ships could narrow before 2030, possibly as early as 2026. Ammonia is gaining recognition as a promising alternative fuel for the shipping industry due to its scalability and ability to be used on long-distance routes. However, the purchase and operation of ammonia-powered gas tankers is currently more expensive than traditional gas tankers. To address this, the Nordic Green Ammonia Powered Ships (NoGAPS) project, co-funded by Nordic Innovation, recently conducted a study to explore cost reduction strategies.

The study focused on the commercialization of early ammonia-powered ships, specifically the M/S NoGAPS, an ammonia-fueled gas carrier intended to operate between the US Gulf and northwestern Europe. The analysis identified various actions that could significantly decrease the cost gap between ammonia and conventional fuel, thereby reducing commercial risks for ammonia and similar projects. Jesse Fahnestock, project leader at the Global Maritime Forum, stated that the completion of this phase of the NoGAPS project provides a detailed ship design that could be used in shipyard tenders, as well as viable paths for commercialization. The hope is that this progress will instill confidence in charter parties and investors to move forward with implementing ammonia-fueled ships.

As the shipping industry seeks solutions for reducing its carbon footprint, ammonia is gaining attention as a potential zero-emission fuel. The analysis by the Global Maritime Forum suggests that cost competitiveness with conventional fuel may be achieved sooner than expected, giving hope for the widespread adoption of ammonia-powered ships in the near future.

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