Maersk’s Christiansen: It will be the end of decade before we can see some scaling-up of ammonia

E-ammonia is the perfect fuel from a production point of view as it uses low-emission electricity, water, and nitrogen as feedstock, its main advantage being that it doesn’t use any carbon in the process, as explained by Morten Bo Christiansen, Vice President of Decarbonization for AP Moller Maersk.

Maersk is looking into the potential of ammonia as one of the future fuels in decarbonizing the shipping industry together with methanol, biodiesel, and liquid hydrogen.

However, even though e-ammonia is a carbon-free fuel, there is a myriad of challenges that are hampering its uptake in the short-term in the shipping industry.

Most notably, ammonia is highly toxic and its handling and combustion could lead to a potential release of nitrous oxide (N20), also known as laughing gas, into the environment. The gas is 300 times more potent than CO2 and highly detrimental to the environment. Further down the line, potential spills of ammonia would be extremely harmful to marine biodiversity therefore the bunkering process, once all safety rules and procedures are in place, is expected to be very complex and expensive.

“Even after these challenges are solved, it would only be able to scale up by the end of this decade, and we don’t have time to wait for that,” Christiansen said during Maersk’s ESG Day presentation held on Tuesday.

Specifically, small tankers powered by ammonia are not expected to enter the market before 2026 as efforts to develop an ammonia-burning engine remain underway. It would be much easier for tankers to operate on ammonia as they can use their cargo for refueling, unlike containerships which require bunkering. As for the medium and large vessels, the first deliveries are expected in 2029 and 2030.

All of the said challenges and the sense of urgency to act now, have prompted Maersk to opt for methanol as a marine fuel, and the company is set to take delivery of its first methanol-powered containership already next year.

Namely, methanol engine technology is available and proven in operation, the fuel is relatively easy to handle and safety challenges are manageable which means that further down the line the bunkering procedure would be relatively simpler and less expensive when compared to ammonia.

What is more, methanol is biodegradable which is another advantage in cases of fuel spills as it would not be harmful to the marine environment.

“When that moment comes and we solve the different challenges in producing, bunkering, and handling ammonia, this will be a great fuel for shipping,” Christiansen added.

“We are also looking into liquified hydrogen but, currently, it is less mature than ammonia. Therefore, green methanol is the only realistic pathway for us.”

The key challenge when it comes to methanol is the insufficient production volume. Maersk has secured a firm supply agreement for its first green container vessel coming next year.

In 2021, Maersk partnered with REintegrate, a subsidiary of the Danish renewable energy company European Energy, to produce green fuel for its first methanol-powered containership.

The renewable energy company is currently building the facility which aims to produce approximately 10,000 tonnes of e-methanol that Maersk’s carbon-neutral vessel will consume annually. 

As for the rest of the 19 methanol-powered vessels on order, Maersk has secured methanol production deals with eight companies and is currently working with Egyptian and Spanish governments on scaling up the production of methanol.

Even though the current agreements in place are Memoranda of Understanding, Christiansen expects these to be matured soon into legally-binding supply deals.

Once the methanol-powered ships are delivered in 2025, the company expects to decrease the use of biodiesel as methanol would be cheaper and more scalable.

As disclosed, the company is currently evaluating over 30 projects in the early stages aimed at developing green fuels which have the potential to be matured into fuel supply deals. The company is receiving pitches from a wide range of companies on a daily basis that are seeking to discuss opportunities in the field. Christiansen noted that these include a wide selection of players from big oil and gas companies, power and chemical companies to renewable energy players.

“The market is really coming to life. We are seeing large companies who are leaning into this and trying to build up this market together with us,” he concluded.