Ammonia-Fuelled Ships Could Be Best Choice Under IMO 2028 Deal: Report

A study by UMAS and UCL shows that ammonia could be the lowest-cost option as early as 2028.

Ammonia dual-fuel ships are set to play a leading role in global shipping's path to net zero, according to a new study released today by UMAS, UCL Energy Institute and Ocean Research Group, undertaken for the Global Maritime Forum.

The report uses total cost of operation (TCO) modelling to assess how different fuel and ship technology choices perform under the IMO's new Net Zero Framework (NZF).

The study finds that, even with conservative assumptions, ammonia-fuelled ships - particularly those able to use blue or e-ammonia - offer the most competitive and flexible compliance pathway from the mid-2030s.

In some scenarios, ammonia could become the lowest-cost option as early as 2028.

The study assumes surplus units generated for using fuels with carbon intensity below the IMO's direct compliance targets remain at their maximum possible price, $380/mtCO2e, until 2050.

During the MEPC 83 session in April, IMO member states agreed on a set of measures to reduce emissions from the shipping industry. The policy framework will be up for adoption at an extraordinary meeting of the MEPC in October.

"Although there are significant complexities and uncertainties in what was agreed in April, even conservative projections of how remaining policy details will be finalised results in a 'no brainer' choice for shipowners in dual fuel ammonia," Dr Tristan Smith, professor at UCL, said.

The study highlights how ammonia's ability to align with multiple decarbonisation strategies, renewable e-fuels, or biofuel blends, gives it an edge in managing both cost and regulatory risk.

Conversely, conventionally fuelled ships and some LNG strategies become uncompetitive as emissions penalties increase.

However, not all sectors get a green light.

The report warns that investment in e-fuel production is being held back by uncertainty around the IMO's reward mechanism for zero and near-zero marine fuels, which is still under development.
Without clearer guidance, fuel producers may delay decisions, risking a bottleneck in supply.

The analysis also notes that ports and suppliers should prioritise investment in ammonia bunkering infrastructure while remaining agile in case of rapid shifts in fuel demand.

While the IMO's framework provides much-needed direction, the study stresses that final clarity on fuel incentives and pricing will be essential to fully unlock decarbonisation investments across the maritime value chain.