Transitioning to low-carbon ammonia or hydrogen fuel

Why is this gap important?

In addition to diversifying the sources of maritime fuel supplies, adopting alternative fuels would help meet the tighter sulphur standards coming into effect in 2020; alternatives to bunker fuel will also be needed to meet SOx and PM emissions limits near a growing number of the world's ports (Emission Control Areas). These near-term air pollution targets can generally be met by switching to low-sulphur diesel or investing in scrubbers, and liquefied natural gas (LNG) is also an option because it does not emit SOx.

Oil demand in this fast-growing sector is set to rise 20% (to 6 million barrels per day) by 2030 unless measures are taken to enforce the IMO’s long-term GHG emissions target. Ship owners must therefore make some important decisions very soon.

In the long term, GHG emissions from international shipping must be cut by at least 50% by 2050. A challenge to meeting this IMO target is that ship lifetimes generally span two to three decades. However, depending on eventual costs and incentives, using ammonia or hydrogen could be a solution.

Technology solutions

Current deployment plans for ammonia or hydrogen focus on relatively small-scale applications, but there is considerable scope for direct and indirect hydrogen use in shipping.

Using hydrogen and ammonia in shipping is especially advantageous because of port infrastructure, particularly when ports are linked with large industrial clusters that have on-site refineries or chemical facilities that already use and produce hydrogen. Scaling up hydrogen (and ammonia) production in such coastal industrial hubs would therefore provide alternative fuel for ships, and these ships could then be used to deliver hydrogen to other parts of the world, establishing maritime trade routes for potentially larger future demand.


Colored bars represent the Technology Readiness Level (TRL) of each technology. Learn more about TRLs

What are the leading initiatives?

A few smaller ships have been equipped with fuel cells in the 100‑kilowatt (kW) to 300‑kW range. Fuel cell applications with low electrical power output (up to 100 kW) have also been deployed in maritime applications (DNV GL, 2018); these rely mostly on PEMFC technology (E4tech, 2018). Fuel cell technologies are currently at TRL-4.

In the near to medium term, implicit or explicit carbon pricing or mandates will be necessary to promote the development and adoption of low-carbon fuel alternatives in shipping. Ammonia produced through low- or zero-carbon methods and used on ships with conventional internal combustion engines currently appears to be the most cost-competitive option. The carbon price needed to make this option break even with very-low-sulphur oil (VLSFO) is highly sensitive to the delivered cost of hydrogen to make ammonia, which is determined by the cost of producing it with a steam methane reformer (SMR) fitted with carbon capture and storage (CCS), and/or electricity costs for hydrogen production via electrolysis. Reducing ammonia and hydrogen supply costs at each step of the value chain will be critical to make these low- and zero-carbon fuels competitive.