D3b.3 - Ammonia Tanker Fleet Analysis

This report contains the results of a study by TNO in 2024. The purpose of this project was to investigate if lack of shipping capacity could be a barrier to uptake of ammonia as a hydrogen carrier in the coming decades. The topic was divided into four research questions, answers to which are summarized below. 

What are the characteristics of the current fleet of vessels transporting ammonia? 

The existing fleet of ammonia-carrying ships is relatively young, largely due to a surge in the construction of LPG carriers around 2014. Although the Clarkson’s ship database lists 758 vessels as potentially suitable for ammonia transport, only an estimated 10 to 20 percent of these are currently used for this purpose. 

What are the expected developments in the fleet between 2025 and 2050? 

The ammonia shipping market is anticipated to expand at a moderate rate, with average annual growth of a few percentage points. Should demand for ammonia shipping rise, the repurposing of existing vessels or the construction of new LPG tankers could swiftly boost ammonia-carrying capacity. Newly built vessels could utilize ammonia as a low-emission marine fuel, similar to how LNG carriers use LNG as both cargo and fuel today. The average size of newly built ammonia carriers is expected to increase to between 50,000 Dead Weight Tonnes (DWT) and 60,000 DWT, or potentially even larger. 

How do the developments in the fleet match with a high-growth scenario for the uptake of ammonia as a hydrogen carrier? 

If ammonia becomes widely adopted as a hydrogen carrier, the demand for ammonia shipping could increase significantly in the coming decades. Under such scenario, maritime trade could increase very significantly from 17 million tons currently to 320 million tonnes in 2050. The required shipping capacity of around 400 can be expanded by building of new ships or repurposing of the existing LPG tanker fleet. The shipbuilding industry has demonstrated its ability to rapidly produce large numbers of LPG carriers in response to rising demand. Many existing ships are also capable of carrying ammonia, although they are currently used for other types of cargo. These ships could be repurposed for ammonia transport without significant modifications. 

Under which circumstances will lack of shipping capacity be a barrier to the uptake of ammonia as a hydrogen carrier? 

A shortage of shipping capacity is unlikely to be a major obstacle to the adoption of ammonia as a hydrogen carrier. Existing ships can be repurposed, or new ships can be constructed quickly to accommodate any foreseeable increase in demand. However, given the cyclical nature of the shipbuilding market and the tendency for vessel supply to lag during periods of rapid trade growth, there may be times when supply is constrained, leading to higher transport costs.