The World is Gearing Up for Rising Trade in Clean Ammonia

After several years of no new builds, there are now 47 VLACs on order for delivery from 2026-2028.  Average capacity for these ships is ~91,000 cubic meters. Recent reports further indicate that Maersk has exercised an option for two more VLACs and that Fortescue is working on an order for five VLACs.

Ammonia is considered to be an effective hydrogen carrier because it can be liquified under milder conditions than pure hydrogen and has higher volumetric energy density. Ammonia is corrosive and toxic but there is an existing global shipping market for ammonia as a feedstock for fertilizer so technical hurdles for transporting ammonia have already been addressed.  

Extracting hydrogen from ammonia at the end of a shipping route is key to enabling this trading market and companies such as Air Liquide, Topsoe and Amogy are advancing this so called “ammonia cracking” technology.  Air Liquide, for example, is building an industrial scale ammonia cracking plant at the Port of Antwerp that is scheduled to be operational this year.  Topsoe’s technology is being tested in Korea, among other projects, where hydrogen will be extracted from blue ammonia for power generation purposes.  Lastly, Amogy’s more compact technology, which took important steps towards implementation this June, will allow VLACs to use ammonia onboard to derive hydrogen for fuel cells that can partially or fully power the ship.  

Last week, the EU awarded a €397 million first of its kind tender for green ammonia to Fertiglobe in Egypt. Fertiglobe then signed a 20-year offtake agreement with Scatec for clean hydrogen that will be processed into ammonia at an existing plant in Egypt.  In combination, the VLACs, the ammonia cracking and the offtake agreements suggest that an era of moving cheap renewable energy around the world may be just a few years away.