Deep dive: Ammonia as shipping fuel & hydrogen carrier — what's working, what's not, and what's next

Global shipping emits roughly 858 million tonnes of CO2 annually, accounting for nearly 3% of worldwide greenhouse gas emissions, and the International Maritime Organization's 2023 revised strategy now targets net-zero emissions by or around 2050 (IMO, 2023). Ammonia has emerged as the leading candidate fuel for deep-sea decarbonization: a 2025 DNV assessment found that 68% of newbuild dual-fuel vessel orders placed since 2024 specify ammonia-ready or ammonia-capable propulsion systems, up from just 12% in 2022 (DNV, 2025). This momentum reflects ammonia's unique combination of zero-carbon combustion, established global production and distribution infrastructure, and energy density sufficient for transoceanic voyages. Yet the path from pilot demonstrations to fleet-scale deployment is marked by significant technical, economic, and safety hurdles that demand clear-eyed evaluation.

Why It Matters

The maritime sector's decarbonization timeline is accelerating under regulatory and commercial pressure. The IMO's indicative checkpoints call for a 20% reduction in emissions by 2030 and a 70% reduction by 2040, relative to 2008 levels. The EU Emissions Trading System expanded to cover maritime transport in January 2024, adding a carbon cost of EUR 60 to 90 per tonne of CO2 to European shipping routes. FuelEU Maritime regulations, effective January 2025, mandate progressive reductions in the greenhouse gas intensity of energy used onboard ships calling at EU ports, reaching a 6% reduction by 2030 and 80% by 2050 (European Commission, 2024).

These regulatory frameworks create a concrete financial incentive for alternative fuels. For a Capesize bulk carrier burning 30,000 tonnes of heavy fuel oil per year, ETS compliance at EUR 75 per tonne represents an additional $7.2 million in annual operating costs. Ammonia as a zero-carbon fuel (when produced from renewable sources) eliminates this liability entirely. The commercial calculus is shifting from "if" to "when," making the technical readiness of ammonia propulsion systems the critical variable.

Ammonia also serves a dual role as a hydrogen carrier. Transporting hydrogen in its molecular form (H2) requires either extreme compression (350 to 700 bar), cryogenic liquefaction (-253 degrees Celsius), or conversion to a chemical carrier. Ammonia (NH3), which liquefies at -33 degrees Celsius at atmospheric pressure or at roughly 10 bar at ambient temperature, offers energy density of 12.7 MJ per liter in liquid form, compared with 8.5 MJ per liter for liquid hydrogen. This makes ammonia an increasingly favored vector for intercontinental hydrogen trade, with the International Energy Agency projecting that ammonia-based hydrogen transport could reach 15 to 25 million tonnes per year by 2035 (IEA, 2024).

Key Concepts

Understanding ammonia's role in maritime decarbonization requires familiarity with several core concepts:

Green, blue, and grey ammonia: Grey ammonia is produced via the Haber-Bosch process using natural gas as both feedstock and energy source, emitting approximately 1.8 tonnes of CO2 per tonne of ammonia. Blue ammonia uses the same process but captures and stores the CO2 emissions, reducing the carbon intensity by 60 to 90%. Green ammonia uses electrolytic hydrogen produced from renewable electricity, combined with nitrogen separated from air, yielding near-zero lifecycle emissions.

Ammonia as a marine fuel: Ammonia can power ships through direct combustion in modified two-stroke or four-stroke engines, or through fuel cells (either directly in solid oxide fuel cells or after cracking back to hydrogen for proton exchange membrane fuel cells). Two-stroke engines are the primary focus for deep-sea shipping due to their power output and compatibility with existing vessel architectures.

Ammonia cracking: The process of decomposing ammonia back into hydrogen and nitrogen at temperatures of 400 to 600 degrees Celsius. Cracking enables ammonia to function as a hydrogen carrier, with the hydrogen subsequently used in fuel cells, gas turbines, or blended into natural gas networks.

NOx and N2O emissions: Ammonia combustion produces nitrogen oxides (NOx) and, under incomplete combustion conditions, nitrous oxide (N2O), which has a global warming potential 273 times that of CO2. Managing these emissions is a critical engineering challenge for ammonia engines.

What's Working

Engine Development Has Reached Commercial Readiness

MAN Energy Solutions delivered the first commercially available two-stroke ammonia engine, the MAN B&W ME-LGIP-A, in late 2024. The engine platform is based on the proven ME-C architecture, modified with new fuel injection systems, corrosion-resistant materials in the combustion chamber, and a selective catalytic reduction (SCR) system optimized for ammonia-derived NOx. MAN reported achieving 50 to 52% thermal efficiency in test bed operations, comparable to conventional heavy fuel oil performance. The first vessel equipped with this engine, the ammonia-fueled tanker Navigator Aurora operated by Navigator Gas, completed sea trials in the North Sea in March 2025 with 1,200 hours of accumulated operation (MAN Energy Solutions, 2025).

WinGD (Winterthur Gas & Diesel) has similarly advanced its X-DF-A ammonia engine, completing full-scale testing at 12 MW output in its Winterthur test facility. WinGD's approach uses a diesel pilot injection (3 to 5% of total energy input) to initiate ammonia combustion, achieving stable ignition across the operating range from 25 to 100% maximum continuous rating. The company has 23 confirmed orders for ammonia-capable newbuilds scheduled for delivery between 2026 and 2028 (WinGD, 2025).

Bunkering Infrastructure Is Taking Shape

Ammonia already moves through a mature global supply chain. Approximately 185 million tonnes are produced annually, with roughly 20 million tonnes traded internationally via dedicated ammonia carriers and handled at specialized terminals in major port complexes. This existing infrastructure provides a significant head start compared with hydrogen, methanol, or other alternative fuels that require entirely new supply chains.

JERA and IHI Corporation launched Japan's first ammonia co-firing demonstration at the Hekinan thermal power station in 2024, establishing ammonia receiving, storage, and handling capabilities at an industrial port facility that can be adapted for marine bunkering. In Europe, the Port of Rotterdam announced a green ammonia import terminal with 1.2 million tonnes per year capacity, scheduled for commissioning in 2027, with bunkering services as a designated use case (Port of Rotterdam, 2025). The Port of Singapore, handling 20% of global bunker fuel sales, committed $400 million to ammonia bunkering infrastructure development through 2030, including dedicated storage tanks, ship-to-ship transfer systems, and emergency response capabilities.

Cost Trajectories Are Improving

Green ammonia production costs have declined from $800 to $1,200 per tonne in 2022 to $550 to $750 per tonne in 2025, driven by falling electrolyzer costs (now below $500 per kW for alkaline systems) and renewable electricity prices below $30 per MWh in favorable locations. NEOM's $8.4 billion green hydrogen and ammonia project in Saudi Arabia, developed by Air Products, ACWA Power, and NEOM, is on track to produce 1.2 million tonnes of green ammonia annually starting in 2026 at a reported production cost of $450 to $550 per tonne (ACWA Power, 2025).

By contrast, very low sulfur fuel oil (VLSFO), the current standard marine fuel, costs $500 to $650 per tonne. When carbon pricing is included (IMO carbon levy proposals range from $50 to $150 per tonne of CO2), the total cost of VLSFO on carbon-regulated routes rises to $700 to $1,100 per tonne on an energy-equivalent basis. Green ammonia is approaching cost parity on the busiest regulated trade lanes, and several major shipping lines have begun signing forward purchase agreements for green ammonia delivery starting in 2027.

What's Not Working

N2O Slip Remains a Critical Unresolved Problem

Incomplete ammonia combustion produces N2O, and even small quantities can negate the climate benefits of switching from fossil fuels. Laboratory and sea trial data from multiple engine programs show N2O emissions of 0.5 to 3.0 g per kWh under varying load conditions, with the highest emissions occurring at low engine loads (25 to 50% MCR) where combustion temperatures are insufficient for complete ammonia oxidation (University of Rostock, 2025).

At the upper end of this range, N2O emissions of 3.0 g per kWh translate to a CO2-equivalent impact of 819 g CO2e per kWh, which exceeds the 620 g CO2e per kWh of conventional marine diesel. This means a poorly optimized ammonia engine can produce a worse climate outcome than the fuel it replaces. Engine manufacturers are actively developing after-treatment solutions, including specialized N2O decomposition catalysts and combustion tuning strategies that maintain higher combustion temperatures at low loads, but no commercially validated system has yet demonstrated N2O emissions consistently below 0.5 g per kWh across the full operating envelope.

Toxicity and Safety Standards Are Incomplete

Ammonia is acutely toxic: exposure to concentrations above 300 parts per million can be fatal within minutes. While the chemical industry has decades of experience handling ammonia in industrial settings, maritime applications introduce unique challenges. Crew exposure scenarios during bunkering, equipment maintenance, and emergency situations require safety protocols that differ significantly from shore-based ammonia handling.

The IMO's interim guidelines for ammonia as a marine fuel, adopted in 2024, establish basic requirements for ventilation, gas detection, and emergency shut-off systems, but detailed prescriptive standards remain under development. Classification societies including Lloyd's Register, DNV, and Bureau Veritas have published provisional class notations, but harmonization across flag states and port authorities is incomplete. Several ports, including Hamburg and Antwerp, have conducted ammonia spill modeling exercises that revealed dispersion patterns requiring exclusion zones of 500 to 2,000 meters under adverse wind conditions, raising questions about bunkering operations in congested port areas.

The absence of finalized international safety standards creates regulatory uncertainty for shipowners. Vessels ordered today for delivery in 2027 or 2028 may require costly modifications if final IMO safety requirements differ from the interim guidelines under which they were designed.

Green Ammonia Supply Remains Insufficient for Shipping Demand

Maritime shipping's projected ammonia demand, estimated at 130 to 200 million tonnes per year by 2050 if ammonia becomes the dominant alternative fuel, would more than double current global ammonia production. As of 2025, announced green ammonia projects total roughly 30 million tonnes per year of nameplate capacity, but fewer than 5 million tonnes per year have reached final investment decision. The gap between announced capacity and bankable projects reflects challenges in securing renewable electricity supply agreements, electrolyzer delivery timelines, and offtake contracts at prices that support project financing (BloombergNEF, 2025).

The NEOM project, the single largest green ammonia development, has experienced 12 to 18 months of construction delays, pushing first production from late 2025 to mid-2026. Electrolyzer supply chain constraints, particularly for large-format alkaline and PEM stacks, have affected multiple projects globally. Thyssenkrupp Nucera, a major electrolyzer supplier, reported an order backlog of 8 GW in early 2025 with delivery timelines extending to 30 to 36 months.

Key Players

Established Companies

MAN Energy Solutions: The dominant two-stroke marine engine manufacturer, with over 50% global market share. Delivered the first commercial ammonia engine in 2024 and has a pipeline of 40+ ammonia-capable engine orders.

WinGD: The second-largest two-stroke engine maker (a subsidiary of China State Shipbuilding Corporation), with its X-DF-A ammonia engine platform in advanced testing and 23 confirmed newbuild orders.

Yara International: The world's largest ammonia producer (8 million tonnes per year) and a key player in green ammonia production, with projects in Norway (Yara Porsgrunn electrification) and Australia (Yara Pilbara green ammonia).

JERA: Japan's largest power generation company, leading ammonia co-firing demonstrations and investing in ammonia supply chain development for both power and maritime applications.

Startups and Emerging Players

Amogy: Developing compact ammonia cracking systems for maritime fuel cell applications. Completed a demonstration on a tugboat in 2024 using ammonia-to-hydrogen conversion feeding a 1 MW PEM fuel cell system.

Fortescue (formerly Fortescue Future Industries): Building a 2 million tonne per year green ammonia production facility in Arizona, with offtake discussions targeting both fertilizer and maritime fuel markets.

Aurorahydrogen: Developing thermocatalytic hydrogen production from natural gas with solid carbon byproduct, positioning as a lower-cost blue hydrogen pathway for ammonia synthesis.

Investors and Financiers

AP Moller Capital: The investment arm of the Maersk family, backing ammonia fuel infrastructure and supply chain ventures.

Brookfield Renewable Partners: Committed $2 billion to green hydrogen and ammonia production projects globally.

Clean Energy Fuels: Expanding from natural gas to ammonia bunkering infrastructure investments at North American ports.

Ammonia Fuel Readiness Summary

Parameter	Current Status (2025)	Target (2030)	Gap Assessment
Engine availability	Commercial (2-stroke)	Multiple platforms	On track
N2O emissions	0.5-3.0 g/kWh	<0.3 g/kWh	Critical gap
Green ammonia cost	$550-750/tonne	$350-450/tonne	Moderate gap
Green ammonia supply	<1 Mt/yr	15-25 Mt/yr	Major gap
Bunkering ports	3-5 (pilot)	30-50	Moderate gap
Safety regulations	Interim guidelines	Final IMO code	On track
Crew training programs	Pilot (200 trained)	10,000+	Major gap
Insurance frameworks	Case-by-case	Standardized	Moderate gap

What's Next

Three developments will determine whether ammonia fulfills its potential as the primary shipping decarbonization fuel by 2030:

First, the IMO's Marine Environment Protection Committee is scheduled to finalize the ammonia fuel safety code by mid-2027. The outcome will either unlock or constrain vessel ordering by establishing definitive requirements for fuel system design, crew safety, and port operations. Early indications suggest the final code will broadly align with current interim guidelines, but requirements for double-walled fuel piping and enhanced ventilation in engine rooms may add 8 to 12% to ammonia fuel system costs compared with current designs.

Second, N2O emission control technology must demonstrate consistent performance below 0.5 g per kWh across all operating conditions. MAN and WinGD are both testing integrated N2O decomposition catalysts (iron-zeolite formulations) downstream of the SCR system, with results expected from long-duration sea trials beginning in late 2025. If these after-treatment systems prove reliable, the climate case for ammonia fuel becomes unassailable; if they fail, ammonia's viability as a climate solution will be seriously questioned.

Third, the green ammonia supply pipeline must convert from announcements to operating facilities. The period from 2026 to 2028 will see the commissioning (or further delay) of several flagship projects including NEOM, the Yara-Engie Pilbara facility, and CIP's GreenHyScale project in Denmark. Successful delivery of these projects at or near announced costs would validate the economic model and trigger the next wave of investment. Continued delays would push green ammonia cost parity back by three to five years and potentially shift shipping company interest toward methanol or bio-LNG alternatives.

Action Checklist

• Evaluate ammonia-ready newbuild specifications with classification society input to ensure compliance with both interim and anticipated final IMO ammonia fuel codes
• Conduct total cost of ownership modeling for ammonia versus VLSFO under current and projected carbon pricing scenarios across primary trade routes
• Engage ammonia suppliers for forward purchase agreements beginning 2027 to 2028 delivery, prioritizing green ammonia with verified lifecycle emissions data
• Develop crew training programs aligned with STCW (Standards of Training, Certification, and Watchkeeping) ammonia competency frameworks currently under IMO development
• Commission independent N2O emission testing on candidate engine platforms under representative operating profiles including partial load conditions
• Establish relationships with port authorities on primary trade routes to understand ammonia bunkering availability timelines and safety requirements
• Review insurance and P&I (Protection and Indemnity) club requirements for ammonia-fueled vessels and negotiate coverage terms before vessel delivery

FAQ

Q: Is ammonia more dangerous than LNG or methanol as a marine fuel? A: Ammonia presents a different risk profile rather than a categorically higher one. Unlike LNG, ammonia is not flammable at ambient conditions (its flammability range is 15 to 28% in air, compared with 5 to 15% for methane). However, ammonia is acutely toxic at concentrations well below its flammability threshold. The chemical industry has operated large-scale ammonia facilities with strong safety records for decades: the US ammonia industry's recordable incident rate is 0.7 per 200,000 work hours, comparable to petroleum refining. Maritime applications require adaptation of these established safety practices to the shipboard environment, including enhanced ventilation, redundant gas detection, and crew training specific to ammonia toxicology and emergency response.

Q: When will green ammonia reach cost parity with conventional marine fuels? A: On carbon-regulated routes (EU ETS, FuelEU Maritime), green ammonia is approaching energy-equivalent cost parity with VLSFO in 2025 to 2026 when carbon costs of EUR 60 to 90 per tonne of CO2 are included. Without carbon pricing, parity requires green ammonia production costs to fall to $350 to $400 per tonne, which most projections place in the 2029 to 2032 timeframe, contingent on continued reductions in electrolyzer and renewable electricity costs. Forward purchase agreements signed in 2025 for 2028 delivery are pricing green ammonia at $500 to $600 per tonne with escalation clauses tied to renewable electricity indices.

Q: Can existing vessels be retrofitted to use ammonia fuel? A: Retrofitting is technically feasible but economically challenging. The primary modifications include: new fuel tanks (ammonia requires approximately 2.5 times the volume of HFO for equivalent energy content), fuel supply systems rated for ammonia's corrosive properties, modified engine components (fuel injectors, combustion chamber materials, SCR systems), and extensive safety systems including gas detection, ventilation, and emergency release. Estimated retrofit costs for a Capesize bulk carrier are $15 to $25 million, representing 15 to 25% of newbuild cost. Most industry analysts expect ammonia adoption to occur primarily through newbuilds rather than retrofits, with ammonia-ready specifications (fuel tank space reservation, structural reinforcement) added to conventional newbuilds at marginal cost of $2 to $4 million.

Q: What role will ammonia cracking play in the hydrogen economy? A: Ammonia cracking, the decomposition of NH3 back to H2 and N2, enables ammonia to serve as a long-distance hydrogen transport vector. Cracking technology is mature at industrial scale (the fertilizer industry has operated ammonia crackers for decades), but achieving the high-purity hydrogen required for PEM fuel cells (99.999%) adds cost and complexity. Current cracking systems achieve 95 to 99% conversion efficiency at 500 to 600 degrees Celsius, with residual ammonia removal to below 0.1 ppm requiring additional purification steps. Companies including Amogy, GenH2, and Topsoe are developing compact maritime cracking systems targeting 85 to 90% round-trip energy efficiency from ammonia synthesis through cracking to hydrogen delivery.

Sources

• International Maritime Organization. (2023). 2023 IMO Strategy on Reduction of GHG Emissions from Ships. London: IMO.
• DNV. (2025). Maritime Forecast to 2050: Energy Transition Outlook. Hovik, Norway: DNV AS.
• European Commission. (2024). FuelEU Maritime Regulation Implementation Guidance. Brussels: EC Directorate-General for Mobility and Transport.
• International Energy Agency. (2024). Global Hydrogen Review 2024. Paris: IEA.
• MAN Energy Solutions. (2025). ME-LGIP-A Ammonia Engine: Technical and Operational Performance Report. Copenhagen: MAN Energy Solutions.
• WinGD. (2025). X-DF-A Ammonia Engine Development: Full-Scale Test Results and Order Pipeline Update. Winterthur: WinGD.
• Port of Rotterdam. (2025). Green Ammonia Import Terminal: Project Overview and Bunkering Integration Plan. Rotterdam: Port of Rotterdam Authority.
• ACWA Power. (2025). NEOM Green Hydrogen Project: Construction Progress and Production Cost Update. Riyadh: ACWA Power.
• BloombergNEF. (2025). Green Ammonia Project Tracker: Announced vs. FID Capacity. London: BNEF.
• University of Rostock. (2025). N2O Emissions from Ammonia Combustion in Marine Two-Stroke Engines: Measurement Campaign Results. Rostock: Chair of Piston Machines and Internal Combustion Engines.