Study: Ammonia-powered ships set to ply West Australia-East Asia iron ore trade by 2028

Ships powered by clean ammonia could be deployed on the iron ore trade routes between West Australia and East Asia by 2028 and reach 5% adoption by 2030.

These are the findings of a study from the West Australia – East Asia Iron Ore Green Corridor Consortium.

The consortium, led by the Global Maritime Forum and comprising resources company BHP, mining company Rio Tinto, and dry bulk shipping companies Oldendorff Carriers and Star Bulk Carriers Corp., signed a letter of intent (LOI) to support the development of the Australia-East Asia iron ore green corridor back in April 2022.

The study indicates that the core elements for the implementation of a West Australia-East Asia green corridor – including deployment of ammonia-powered ships, access to clean ammonia (as the most likely zero-emission fuel to power the corridor), and the availability of the bunkering infrastructure – are within reach, provided that the safety case for the use of ammonia as a marine fuel is validated and accepted.

Findings suggest that it is possible to get clean ammonia-powered bulk carriers on the water by 2028, provided the development of key technologies, such as suitable engines, and regulations remain on track. Enough clean ammonia will likely be available to meet the corridor’s near and long-term requirements, the study said.

Should production scale up as expected, the corridor’s demand could be fully met by Australian clean ammonia but could also be imported from other production locations globally. The study also shows that the Pilbara region of Australia is a viable option for bunkering on the route, avoiding costly deviations from the trade route, whilst Singapore remains well-positioned to serve as a bunkering hub.

Should the corridor develop in accordance with the scenario in the analysis, more than 20 vessels could operate on clean ammonia on the corridor by 2030, scaling up to roughly 360 vessels by 2050.

‘’The study demonstrates the industry’s keen interest to decarbonise their supply chain in the region. What is needed now to accelerate the development of this green corridor is public sector support,’’ Johannah Christensen, CEO of the Global Maritime Forum, said.

The study also outlines important conditions that must be in place for the corridor to be successfully developed, including continued collaboration and coordinated action through the corridor’s value chain and the development of appropriate commercial frameworks.

In parallel with this study, the Getting to Zero Coalition has established an Australia-East Asia Iron Ore Corridor Task Force to act as a collaborative industry forum to explore these issues.

The study is based on analysis by the Energy Transitions Commission, on behalf of the West Australia – East Asia Iron Ore Green Corridor Consortium.

The study reinforces the corridor’s potential to be a first mover in shipping’s decarbonisation and builds on the previously published pre-feasibility report, which identified the iron ore shipping routes from West Australia to China and Japan as having favourable conditions for early action and the potential to have a large impact on the decarbonisation of the sector.

“Through this collaboration with the Global Maritime Forum and the consortium members, BHP is pleased to see that the rigorous, data-led analysis of this study indicates the feasibility of using clean ammonia on vessels sailing through the West Australia to East Asia corridor. In line with our net zero ambitions, we seek to influence this supply chain, with our ecosystem partners, by creating demand for low- and zero-GHG emission fuels and energy efficient vessels,” comments Rashpal Bhatti, Vice President Maritime and Supply Chain Excellence at BHP.

“Being one of the founding members of the West Australia -East Asia Iron Ore Green Corridor Consortium was an excellent opportunity for Oldendorff Carriers to collaborate and share perspectives with the other Consortium members on the feasibility of reducing emissions on this strategic iron ore trade,” said Scott Bergeron, Managing Director Global Engagement & Sustainability at Oldendorff Carriers.

“While outside the scope of this report, the safety concerns and environmental risks of ammonia have yet to be adequately addressed. As the safety of our crew is paramount, these challenges must be overcome to enable adoption.”

“This study has allowed us to examine the potential for the demand, supply, and bunkering of clean ammonia in the West-Australia – East Asia corridor, an important trade route for our larger vessels. Through this work, we aim to complement parallel efforts of the industry to tackle other challenges related to ammonia as a marine fuel, including safety protocols and new engine designs, and to help advance the sector’s understanding on the pathway to a greener future,” said Charis Plakantonaki, Chief Strategy Officer at Star Bulk.

Another iron ore corridor is in the making. Namely, a consortium comprising UK-based mining company Anglo American, Tata Steel, CMB, VUKA Marine, Freeport Saldanha, and ENGIE plans to explore the options for developing a maritime green corridor for the zero-emission shipping of iron ore between South Africa and Europe.

The consortium will look at bunkering and offtake arrangements, available green fuel supplies, and financial and business model alternatives.

The development of the green corridor could help drive forward South Africa’s decarbonization ambitions and serve a range of wider national and international objectives.

The creation of green corridors offers the opportunity to accelerate shipping’s transition to zero emissions.

They offer scope for participation from all value chain actors needed to scale low or zero-emission shipping, including fuel producers, shipowners and operators, cargo owners, and regulatory authorities.

They could provide offtake certainty to fuel providers, supporting investments in zero-emission fuel plants and essential bunkering infrastructure and generate strong demand signals to shipowners and operators, shipyards, and engine manufacturers to catalyze and scale investments in zero-emission shipping technologies.