VIEWPOINT: 'Ammonia-Ready' Ships - Greenwashing or Milestone to Zero Carbon?

by Jack Jordan, Managing Editor, Ship & Bunker
Thursday February 4, 2021

News last month that ABS had awarded a newbuild with the world's first 'ammonia-ready' designation from a classification society has prompted a lively discussion among Ship & Bunker readers.

The vessel, ordered by Avin International, will initially be conventionally powered and, given the current outlook for ammonia uptake, seems likely to remain that way for much of its commercial life.

A number of readers have written in to say the move as nothing more than an exercise in greenwashing, pointing to an apparently somewhat inclusive definition of what being 'ammonia-ready' actually entails.

On the other side of the argument, shipowners, industry bodies and the media are united in saying the industry urgently needs to take steps towards decarbonisation, and that concrete solutions will not be found until billions have been spent over many years of R&D.

Perhaps, then, an ammonia-ready designation is a much-needed reminder that existing tonnage designs are closer to being future-ready that we are giving them credit for?

Why Should We Be Excited About Ammonia Anyway?

Ammonia (NH3) produced using renewable electricity is a carbon-free source of energy, and is thus of great interest as part of the decarbonization effort.

At ambient temperatures it is a liquid fuel with similar onboard handing characteristics to conventional oil-based bunker fuels. It comes without LNG's disadvantage of needing special fuel tanks and fuel system components, along with vessel construction materials that can withstand an LNG spill. In theory ammonia-powered vessels would not require such considerations, making retrofits to any existing vessel relatively straightforward.  

Indeed, the key barrier to wider uptake of ammonia as marine fuel lies not with current vessel design but with production. Right now this is a highly energy-intensive, non-GHG friendly process. Some 230 million metric tonnes (mt) of ammonia produced this way annually, with 80% used in fertilizer.

"Like many of the emerging clean fuels, scaling up production to commercial quantities of blue or green ammonia may take many years," engineering company Wärtsilä said in a document examining ammonia's potential as a bunker fuel last month.

"It is therefore unlikely that carbon-neutral ammonia will be available initially in big enough quantities to ensure that vessels will be able to run fully on carbon-neutral ammonia.

"At the same time, shipowners would be uncomfortable about switching to a new fuel overnight. The most likely scenario for using ammonia is therefore that owners will use it initially as a drop-in fuel, building up confidence in using and handling the fuel before eventually increasing their use and switching over to full reliance on ammonia."

What Exactly Does Ammonia-Ready Mean?

In its statement announcing the Avin Suezmax winning its ammonia-ready level one notation, ABS said the label means the ship "is designed to be converted to run on ammonia in the future."

Technical documentation on the ABS website gives further detail on what the standard entails.

"Basic suitability would mean that the geometry and structural arrangements of the vessel can physically encompass the necessary equipment and the safety elements associated with tank location and that the hazardous areas can be accommodated," according to the ABS guide to alternative fuel readiness levels.

The shipowner also has to provide an overview of the 'fuel concept' for the vessel, fuel storage arrangements and other details of how ammonia as a fuel could be accommodated into the vessel, a spokesman for ABS told Ship & Bunker. 

"The 'ready' provisions can provide recognition of the maturity of an alternative fuel design, and help to simplify later conversion," the spokesman added.

"This can reduce conversion costs and provide some confidence in the future viability of the asset."

Future Viability

Demonstrating that future viability is clearly a key consideration for a shipowner seeking to win this notation for its new vessel.

Shipowners are likely to face increasing iciness from the banking industry in the coming years as they seek to secure financing for new ships that continue to burn fossil fuels. In the absence of zero-carbon fuels being available now, and with a pressing need to order new ships, a shipowner could be tempted by a notation that advertises a future intention to decarbonise.

"With LNG, we saw a number of contracts for LNG ready level 1 in 2015, with more contracts for LNG ready level 2 in 2017," marine fuels specialist Nigel Draffin told Ship & Bunker recently.

"Almost all of these vessels which were built were classed as either LNG fuelled or as LNG level 3.

"I see the ammonia route as being similar."

Greenwashing Opportunity?

The question that hangs over the ammonia-ready or similar designations is whether a less scrupulous owner could use it as evidence of plans to decarbonise, while having no real intention of carrying through with the plan. 

Asked about this possibility, the ABS spokesman focused on how the notation gives owners future options -- rather than committing them to a single path.

"The ABS fuel-ready framework and qualification is designed to give owners flexibility as they consider their fuel options," the spokesman said.

"This is important as the industry gains clarity around emerging fuel technologies."

But, as Nigel Draffin points out, future commitments to retrofit to ammonia power may be thinner on the ground than interest in the ammonia-ready labels.

"Note that very few vessels have had retrofit conversions from conventional engines to duel-fuel engines to date," Draffin said last month.

"The most significant of these was the Bit Viking, and that was financed with large amounts of money saved by the Norwegian NOx tax incentive.

"Without such incentives, conversion from conventional diesel to duel-fuel on a vessel already built (even one with AIP level one 'ammonia-ready' notation) is very unlikely."