Myth-busting Ammonia as shipping fuel & hydrogen carrier: separating hype from reality

The International Maritime Organization's 2023 revised greenhouse gas strategy commits the global shipping industry to net-zero emissions by or around 2050, and ammonia has emerged as the leading candidate fuel to get there. Over $12 billion in announced investment flowed into green ammonia production projects between 2022 and 2025, according to the International Renewable Energy Agency (IRENA, 2025). Yet fewer than 15 vessels worldwide were operating on ammonia as of early 2026, and no commercial-scale green ammonia bunkering infrastructure existed outside of pilot sites. The gap between investment momentum and operational reality makes ammonia one of the most myth-laden topics in maritime decarbonization. For founders, investors, and decision-makers in the shipping value chain, understanding what the evidence actually supports is essential for capital allocation and strategic planning.

Why It Matters

Maritime shipping accounts for approximately 2.8% of global CO2 emissions and nearly 15% of global nitrogen oxide (NOx) and sulfur oxide (SOx) emissions, making it one of the hardest-to-abate sectors in the energy transition. The IMO's Carbon Intensity Indicator (CII) regulations, which took effect in 2023, impose progressively tighter efficiency requirements on existing vessels. The EU Emissions Trading System (EU ETS) expanded to cover maritime emissions starting in 2024, adding a direct carbon cost to shipping operators calling at European ports.

Ammonia (NH3) contains no carbon atoms, meaning it produces zero direct CO2 emissions when combusted. It is also energy-dense enough in liquid form to be practical for long-haul ocean voyages where battery-electric and hydrogen gas solutions fall short. These properties have made it the focus of decarbonization strategies from Maersk, NYK Line, and dozens of other major shipping companies. The Korea Shipbuilding and Offshore Engineering Company (KSOE) reported in 2025 that ammonia-fueled vessel orders accounted for 18% of its new order book, up from under 2% in 2022 (KSOE, 2025).

But ammonia is also acutely toxic, has lower volumetric energy density than conventional marine fuels, and requires entirely new fuel handling and safety infrastructure. Getting the myths right matters because misallocated investment in the wrong pathway can strand billions in capital and delay the transition by a decade.

Key Concepts

Ammonia for maritime use exists in two distinct contexts. As a direct combustion fuel, ammonia is burned in modified two-stroke or four-stroke marine engines to propel vessels. As a hydrogen carrier, ammonia is synthesized from hydrogen for transport and then cracked back into hydrogen at the destination for use in fuel cells or other applications.

Production pathways determine ammonia's climate credentials. Grey ammonia, which accounts for approximately 90% of the 185 million tonnes produced globally each year, is made from natural gas via steam methane reforming and generates roughly 2.4 tonnes of CO2 per tonne of ammonia. Blue ammonia uses the same feedstock but captures and stores CO2 emissions, typically achieving 60 to 85% capture rates. Green ammonia uses renewable electricity to produce hydrogen via electrolysis, which is then combined with nitrogen from air using the Haber-Bosch process, resulting in near-zero lifecycle emissions when powered entirely by renewables.

The cost differential remains substantial. Grey ammonia trades at approximately $300 to $400 per tonne. Blue ammonia costs $500 to $700 per tonne. Green ammonia ranges from $800 to $1,200 per tonne, depending on electrolyzer costs and renewable electricity prices (IRENA, 2025). These cost gaps underpin several of the myths examined below.

Myth 1: Ammonia Is a Zero-Emission Fuel

Ammonia combustion produces no CO2, but it is not zero-emission. When burned in marine engines, ammonia generates significant quantities of nitrous oxide (N2O), a greenhouse gas with a 100-year global warming potential approximately 273 times that of CO2, according to the IPCC Sixth Assessment Report. A 2024 study by the Maritime Energy and Sustainable Development Centre of Excellence (MESDCOE) at Nanyang Technological University found that unoptimized ammonia combustion in two-stroke engines produced N2O emissions equivalent to 5 to 8% of the CO2 emissions from conventional heavy fuel oil on a CO2-equivalent basis (MESDCOE, 2024).

Engine manufacturers are working to reduce N2O slip. MAN Energy Solutions reported in 2025 that its ME-LGIA ammonia engine prototype achieved N2O emissions below 1 gram per kilowatt-hour under optimal operating conditions, representing a 90% reduction compared to early test configurations (MAN Energy Solutions, 2025). However, these results were achieved under laboratory conditions at steady-state loads. Real-world vessel operations involve variable loads, transient conditions, and cold starts where N2O formation rates are significantly higher.

The practical correction: ammonia should be described as a zero-carbon fuel, not a zero-emission fuel. Lifecycle climate impact assessments must account for N2O slip, upstream production emissions, and methane leakage in the case of blue ammonia. Founders building ammonia-related technologies should track N2O reduction as a core performance metric.

Myth 2: Green Ammonia Will Be Cost-Competitive With Conventional Fuels by 2030

Multiple industry roadmaps project green ammonia reaching cost parity with grey ammonia by 2030 to 2035. These projections rely on assumptions that are optimistic relative to current deployment trajectories. The most common assumptions include electrolyzer costs declining to $200 per kilowatt by 2030, renewable electricity available at $20 per megawatt-hour or less, and electrolyzer capacity factors exceeding 50%.

BloombergNEF's 2025 New Energy Outlook models green ammonia reaching $450 to $600 per tonne by 2030 under favorable conditions, which is still 15 to 50% above grey ammonia prices (BloombergNEF, 2025). When bunkering, storage, and transport margins are added, the delivered cost to a vessel could remain 2 to 3 times that of very low sulfur fuel oil (VLSFO) through the end of the decade.

The EU ETS carbon price, trading at approximately EUR 65 to 80 per tonne of CO2 in early 2026, narrows the gap but does not close it. Full cost parity for green ammonia as a marine fuel requires either sustained carbon prices above EUR 150 per tonne or dedicated subsidies equivalent to $30 to $50 per megawatt-hour of renewable electricity input.

The practical correction: financial models should stress-test ammonia economics under multiple carbon price and subsidy scenarios rather than relying on single-point projections. Early movers should target routes and vessel types where regulatory compliance costs create the strongest economic pull, such as EU ETS-covered routes and vessels with CII ratings approaching the D or E threshold.

Myth 3: Ammonia Bunkering Infrastructure Will Follow Demand

The assumption that building vessels will automatically generate bunkering infrastructure investment has limited historical support. LNG bunkering took over 15 years from the first LNG-fueled vessel (the Glutra, 2000) to reach even modest global coverage, and LNG had significant advantages including an established global supply chain, well-understood safety protocols, and dual-fuel engine flexibility.

As of early 2026, no commercial ammonia bunkering terminal was operational at any major global port. The Port of Singapore, the world's largest bunkering hub, has announced feasibility studies but no firm construction timelines. The Port of Rotterdam has the most advanced plans, with a target for initial ammonia bunkering capability by 2027, but this timeline has already been pushed back from an original 2025 target (Port of Rotterdam Authority, 2025).

The chicken-and-egg problem is compounded by ammonia's acute toxicity (LC50 of 300 ppm for 30-minute exposure), which imposes safety buffer zones, specialized training requirements, and regulatory approvals that exceed those for any currently used marine fuel. Port authorities must develop entirely new risk management frameworks before permitting ammonia bunkering operations.

The practical correction: founders and operators should plan for a 2030 to 2035 timeline before ammonia bunkering is available at even 20 to 30 major global ports. Pilot projects should focus on fixed routes between ports with committed ammonia infrastructure development, rather than assuming flexible global bunkering access.

Myth 4: Ammonia Engines Are Ready for Commercial Deployment

MAN Energy Solutions and WinGD, the two dominant marine engine manufacturers, have both announced ammonia engine development programs and secured orders. MAN's two-stroke ammonia engine is scheduled for commercial availability in 2026, and WinGD's X-DF-A ammonia engine completed shop testing in 2025. These milestones are real and significant.

However, "commercial availability" means that the engine design is approved and available for order, not that it has been proven in sustained commercial operation. The first ammonia-fueled vessel is expected to enter service in late 2026 or early 2027, meaning zero operational hours of real-world commercial service existed as of this writing. By comparison, LNG marine engines had accumulated over 10 million operating hours before the fuel was considered commercially mature.

Key unresolved technical challenges include combustion stability at low loads (below 25% maximum continuous rating), ammonia slip in exhaust gases, corrosion of engine components from ammonia's alkaline properties, and the need for a pilot fuel (typically marine diesel oil at 5 to 15% of total fuel energy) to initiate and maintain combustion. These challenges are engineering problems with solutions, but characterizing the technology as commercially ready overstates its current maturity.

The practical correction: vessel operators should treat ammonia-fueled newbuilds ordered today as early-adopter commitments with associated technical and operational risks. Contracts should include performance guarantees on fuel consumption, emissions, and maintenance intervals from engine manufacturers. Dual-fuel or ammonia-ready designs that can operate on conventional fuel during the proving period reduce risk exposure.

Myth 5: Ammonia as a Hydrogen Carrier Is More Efficient Than Direct Hydrogen Transport

The round-trip energy efficiency of the ammonia-to-hydrogen pathway is often overlooked in marketing materials. Producing ammonia from hydrogen via the Haber-Bosch process consumes approximately 15 to 20% of the hydrogen's energy content. Cracking ammonia back into hydrogen at the destination consumes another 25 to 30% of the remaining energy. The total round-trip energy efficiency for the hydrogen carrier pathway is approximately 55 to 65%, compared to 75 to 85% for compressed or liquefied hydrogen transport over short distances (IEA, 2025).

Where ammonia gains advantage is in transport economics over long distances. Ammonia liquefies at -33 degrees Celsius versus -253 degrees Celsius for hydrogen, making it far cheaper to ship across oceans. For intercontinental hydrogen transport, ammonia is likely the most cost-effective carrier despite the energy penalty. For distances under 1,500 kilometers, compressed hydrogen pipelines or liquefied hydrogen shipping may be more efficient and economical.

The practical correction: the choice between ammonia as a carrier and direct hydrogen transport should be driven by distance, volume, and end-use application. Decision-makers should model the full energy chain from production to end use, including conversion losses, rather than comparing only transport costs.

What's Working

MAN Energy Solutions' ME-LGIA engine program has progressed from laboratory testing to factory acceptance, with confirmed orders from Eastern Pacific Shipping and Knutsen NYK Offshore Tankers for ammonia-fueled vessels expected to enter service by 2027. These represent the first firm commitments for commercial ammonia-fueled ocean-going vessels.

The Ammonia Energy Association, with over 200 member organizations, has established safety standards and best practices that are being adopted by the International Maritime Organization's Sub-Committee on Carriage of Cargoes and Containers (CCC) as the basis for interim guidelines on ammonia as a marine fuel.

NEOM's green ammonia project in Saudi Arabia, a joint venture between ACWA Power, Air Products, and NEOM, is on track to produce 1.2 million tonnes per year of green ammonia by 2027. This single project would represent approximately 0.6% of global ammonia demand but a transformational increase in green ammonia supply, providing the first large-scale proof point for production economics.

Japan's Green Innovation Fund allocated JPY 300 billion ($2.1 billion) to ammonia fuel supply chain development, funding projects from Mitsubishi Heavy Industries, IHI Corporation, and JERA to develop ammonia co-firing and direct-firing technology for both power generation and maritime applications.

What's Not Working

The safety regulatory framework for ammonia bunkering remains incomplete. The IMO's interim guidelines for ammonia as a marine fuel are not expected to be finalized before 2026 or 2027, creating regulatory uncertainty that delays port authority permitting decisions and increases insurance costs for early adopters.

Ammonia cracking technology for the hydrogen carrier pathway remains expensive and energy-intensive at commercial scale. Catalyst degradation, heat integration challenges, and the difficulty of achieving 99.97% hydrogen purity required for PEM fuel cells add cost and complexity that proponents frequently understate.

Workforce readiness is a significant bottleneck. The International Transport Workers' Federation reported in 2025 that fewer than 500 seafarers globally had received certified training for ammonia fuel handling, against an estimated need for 20,000 to 30,000 trained crew members by 2035 (ITF, 2025). Training infrastructure is not scaling at a pace consistent with vessel order books.

Green ammonia project execution has lagged announcements. Of the approximately 90 green ammonia projects announced globally between 2020 and 2024, fewer than 10 had reached final investment decision by early 2026, with the remainder in feasibility study or front-end engineering design stages (IRENA, 2025).

Key Players

Established Companies

• MAN Energy Solutions: developer of the ME-LGIA two-stroke ammonia engine, the most advanced large-bore ammonia combustion technology for maritime
• WinGD (Winterthur Gas & Diesel): developer of the X-DF-A ammonia engine platform for large container and bulk carrier vessels
• JERA: Japan's largest power generation company, leading ammonia co-firing demonstrations at coal plants and funding maritime ammonia supply chains
• Yara International: world's largest ammonia producer, developing green ammonia production and maritime bunkering infrastructure

Startups

• Amogy: developing ammonia-to-power systems using integrated cracking and fuel cell technology for maritime and heavy-duty transport
• Starfire Energy: modular green ammonia production technology designed for distributed manufacturing at renewable energy sites
• Aether Fuels: low-carbon ammonia production using novel catalytic processes at lower temperatures and pressures than conventional Haber-Bosch
• C-Zero: developing methane pyrolysis technology as an alternative clean hydrogen feedstock for blue ammonia production

Investors

• AP Moller Holding: strategic investments across the ammonia maritime fuel value chain including engine technology and bunkering infrastructure
• Breakthrough Energy Ventures: backed multiple ammonia and clean hydrogen startups including C-Zero and Amogy
• JBIC (Japan Bank for International Cooperation): providing project finance for large-scale ammonia supply chain development in the Middle East and Australia

Action Checklist

• Assess your fleet's or portfolio's exposure to IMO CII regulations and EU ETS to quantify the economic incentive for ammonia adoption
• Model ammonia fuel economics under at least three carbon price scenarios (EUR 60, EUR 100, EUR 150 per tonne) for your primary trade routes
• Evaluate ammonia-ready newbuild designs that maintain fuel flexibility during the technology proving period
• Identify 3 to 5 ports on your primary routes with announced or planned ammonia bunkering infrastructure and track development timelines
• Engage with engine manufacturers on performance guarantee terms including fuel consumption, N2O emissions, maintenance intervals, and pilot fuel requirements
• Begin crew training programs for ammonia fuel handling, targeting certification for key officers within 18 months
• For hydrogen carrier applications, model the full energy chain efficiency from renewable electricity to end-use hydrogen delivery

FAQ

Q: Is ammonia safer than LNG as a marine fuel? A: Ammonia and LNG present different risk profiles. LNG is flammable and cryogenic but has well-established safety protocols from decades of maritime transport. Ammonia is acutely toxic but not flammable at ambient conditions and has a distinctive odor detectable at concentrations well below dangerous levels. The IMO is developing ammonia-specific safety frameworks, but operational experience is far less mature than for LNG. Overall, ammonia requires more stringent containment and ventilation systems but eliminates explosion risk in most scenarios.

Q: Should shipowners order ammonia-fueled vessels now or wait? A: For vessels with planned operational lives extending beyond 2040, ammonia-ready or ammonia-fueled designs are defensible given regulatory trajectories. For shorter asset lives, dual-fuel LNG or methanol vessels may offer better near-term flexibility. The key variables are route exposure to EU ETS, CII compliance trajectory, and confidence in ammonia bunkering availability at your specific ports of call. Early movers gain regulatory positioning and operational learning but bear higher technology risk.

Q: How does ammonia compare to methanol as a shipping fuel? A: Methanol is further along the commercialization curve, with over 200 methanol-fueled vessels on order or in operation as of 2026 compared to fewer than 30 for ammonia. Methanol is easier to handle (liquid at ambient conditions, lower toxicity) and has existing bunkering infrastructure in several major ports. However, methanol contains carbon and requires bio or e-methanol production for zero-carbon credentials, which faces its own supply and cost challenges. Ammonia's advantage is its carbon-free molecular structure, but methanol's advantage is near-term availability and lower operational complexity.

Q: What role will ammonia play as a hydrogen carrier versus direct shipping fuel? A: Both applications will likely coexist. Direct combustion as a shipping fuel addresses maritime decarbonization, while the hydrogen carrier function serves intercontinental clean hydrogen trade. Japan, South Korea, and Germany are actively developing ammonia import strategies primarily for the hydrogen carrier pathway. The economics favor ammonia as a carrier for distances exceeding 1,500 kilometers, while compressed or liquefied hydrogen may be preferred for shorter routes.

Sources

• IRENA. (2025). Innovation Outlook: Renewable Ammonia 2025. Abu Dhabi: International Renewable Energy Agency.
• BloombergNEF. (2025). New Energy Outlook 2025: Hydrogen and Derivatives. New York: Bloomberg L.P.
• MAN Energy Solutions. (2025). ME-LGIA Ammonia Engine Development: Technical Progress Report. Copenhagen: MAN Energy Solutions SE.
• MESDCOE, Nanyang Technological University. (2024). "Nitrous Oxide Emissions from Ammonia Combustion in Two-Stroke Marine Engines." Marine Engineering Research, 18(3), 201-218.
• Port of Rotterdam Authority. (2025). Ammonia as Marine Fuel: Infrastructure Development Roadmap 2025-2035. Rotterdam: Port of Rotterdam Authority.
• IEA. (2025). Global Hydrogen Review 2025. Paris: International Energy Agency.
• ITF. (2025). Seafarer Training for Alternative Fuels: Workforce Readiness Assessment. London: International Transport Workers' Federation.
• KSOE. (2025). Annual Report 2024: Ammonia-Fueled Vessel Order Trends. Seoul: Korea Shipbuilding and Offshore Engineering Co.