Unlocking the Potential of Ammonia as a Renewable Fuel

Key takeaways from our latest white paper

In the global journey to net zero, ammonia has taken center stage as a promising sustainable energy solution. Our recent white paper, Ammonia as an Essential Energy Carrier for the Energy Transition, delves into the potential ammonia holds as a clean fuel, particularly for the shipping industry and other hard-to-abate sectors. However, the path to adopting ammonia as a fuel depends on several crucial elements: significant investments from private stakeholders, collaboration among industry peers, and a supportive regulatory environment.

In this blog, we explore the key takeaways from this white paper.

Policy Incentives Are Essential

For ammonia to contribute to net zero goals, there must be an increase in clean ammonia production. This can be achieved by motivating clean ammonia producers with policy incentives. Examples include government funding, such as the U.S. Inflation Reduction Act; subsidy mechanisms, such as Production Tax Credits and Investment Tax Credits; and investment enterprises, like Enova in Norway. These steps lower the costs of producing clean ammonia and have been well-received by developers. Using similar incentives, global policymakers can establish a supportive environment that encourages the growth of clean ammonia production.

Carbon Taxes as a Tool

Alongside production incentives, measures that boost renewable fuel usage are also necessary. Thus, carbon taxes are crucial for encouraging ammonia adoption in shipping. In the European Union, the expansion of the Emissions Trading System and the introduction of the FuelEU Maritime initiative promote renewable fuels in maritime operations. The global implementation of carbon taxes can further solidify ammonia’s role in the maritime landscape.

Supporting Shipowners

Shipowners don’t have sufficient support to implement clean, zero carbon technologies onboard their vessels. Even though rewards and taxes can make clean fuels more affordable, shipowners still need to pay additional costs for installation of the new technologies and components. To help the market grow, policymakers can implement additional incentives that lower the cost of installing these onboard technologies.

Priorities for Shipowners

Shipowners should focus on two important things: setting targets and being early adopters. Setting ambitious goals sends a clear signal to stakeholders in the ammonia sector that they are ready for adoption. These goals can speed up investments in ammonia production, infrastructure, and innovative technology.

Addressing Safety Concerns

While ammonia has been safely transported for many years, addressing lingering safety concerns is imperative. Collaboration between industry stakeholders and regulators is crucial to accelerate the implementation of safety guidelines and procedures for using ammonia as a fuel. Simultaneously, ammonia technology providers should demonstrate the safe utilization of ammonia as a fuel through collaborations and pilot projects. For example, the demonstrations of our ammonia-to-power technology in a 5kW drone, 100kW tractor, and 300kW semi-truck have shown the safe viability of ammonia as fuel.

Championing IMO’s Recommendations

The International Maritime Organization’s vision of net-zero emissions from international shipping by 2050 requires steadfast commitment from around the globe. To achieve these ambitious targets, governments must take action by creating policy frameworks that align with the IMO’s timeline for renewable fuel adoption.

In conclusion, the takeaways from this white paper reveal the potential of ammonia as a clean fuel, positioned to revolutionize industries facing the challenges of decarbonization. By fostering collaboration, innovation, and supportive policies, the path to a more sustainable future is clear. As stakeholders across the board unite in their commitment, ammonia will become a key enabler to the energy transition.

Download our white paper for a full report on ammonia as an essential energy carrier for the energy transition. Access it here.