May 18, 2024

Green Ammonia could Revolutionize Global Shipping and Reduce Carbon Emissions

According to a recent study published in Environmental Research: Infrastructure and Sustainability, green ammonia has the potential to meet over 60% of the fuel demands of global shipping. By targeting just the top 10 regional fuel ports, this alternative fuel could significantly contribute to decarbonizing the shipping industry by 2050. Researchers from the University of Oxford analyzed the production costs of ammonia and concluded that it could be a viable option for reducing greenhouse gas emissions.

The transition to a green ammonia fuel supply chain by 2050 would require an estimated $2 trillion investment, primarily for financing supply infrastructure. The study identifies Australia as the region requiring the greatest investment to supply Asian markets. Additionally, large production clusters are anticipated in Chile (to serve South America), California (to supply the western US), northwest Africa (to meet European demand), and the southern Arabian Peninsula (to cater to local demand and parts of South Asia).

Currently, ships that burn heavy fuel oil and emit toxic pollutants transport around 90% of the world’s physical goods trade. This contributes to nearly 3% of global greenhouse gas emissions. In 2018, the International Maritime Organization (IMO) made a commitment to decarbonize international shipping and aims to reduce greenhouse gas emissions by 50% by 2050. Recently, the IMO has revised its targets to achieve net-zero emissions by 2050.

Previously, there has been uncertainty regarding the infrastructure required for a reliable and efficient green ammonia supply chain. Diesel vessel exhaust scrubbers were initially considered, but green ammonia, produced by electrolyzing water with renewable electricity, has emerged as a more viable alternative.

René Bañares-Alcántara, Professor of Chemical Engineering at the University of Oxford, explains that decarbonizing the shipping industry is challenging due to the need for high-energy-density fuel and the complexity of coordinating various stakeholders involved in producing, utilizing, and financing alternative fuel supplies.

To guide potential investors, the research team at the University of Oxford developed a modeling framework to create sustainable scenarios for establishing a global green ammonia fuel supply chain. This framework combines a fuel demand model, future trade scenarios, and a spatial optimization model for green ammonia production, storage, and transport. The aim is to identify the best locations to fulfill future shipping fuel demands.

Professor Bañares-Alcántara emphasizes the significance of this research, stating that it proposes a shift from current reliance on oil-producing nations to a more regionalized industry. Green ammonia production would be concentrated in countries near the equator with ample land and high solar potential. It would then be transported to regional centers of shipping fuel demand, creating a more sustainable and efficient system.

Overall, the study highlights the immense potential of green ammonia in decarbonizing the shipping industry. By strategically establishing a global green ammonia fuel supply chain, significant progress can be made towards reducing greenhouse gas emissions and achieving the IMO’s goals for a sustainable shipping sector.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it