Paper details ammonia bunkering scenarios for creating Australia- East Asia iron ore green corridor

The Global Maritime Forum on Wednesday (27 March) published a position paper outlining why Australia would benefit from supporting an Australia- East Asia iron ore green corridor, ammonia-fuelled ships, by presenting three implementation scenarios and suggestions for policy support. 

The paper, addressed to the Australian government, was supported by a task force of 15 industry representatives from across the value chain that convened under the Getting to Zero Coalition to explore the implementation of the corridor.

A May 2023 feasibility study by four task force members found that the availability of ammonia-powered ships, access to zero or near-zero carbon ammonia, and the availability of bunkering infrastructure could, given a set of conditions, be in place to enable the corridor’s kick off by 2028 and achieve 5% uptake of zero or near-zero carbon ammonia on the route by 2030, in line with the International Maritime Organization (IMO)’s fuel uptake target in its revised greenhouse gas (GHG) strategy.

The wider task force has also produced a shared roadmap identifying the actions needed to realise these goals. Meanwhile, many of the individual companies have already signalled their willingness to act by initiating activities related to the ordering of ammonia-powered vessels and services, production of zero or near-zero carbon ammonia, and development of bunkering infrastructure.

In the paper, the Australia-East Asia Iron Ore Green Corridor task force has identified three implementation scenarios based on the different fuel production and bunkering options for establishing the corridor:

1. Delivering the corridor using domestically produced zero or near-zero carbon ammonia bunkered in the Pilbara
2. Delivering the corridor using domestically produced zero or near-zero carbon ammonia bunkered in Singapore
3. Delivering the corridor using internationally sourced zero or near-zero carbon ammonia bunkered in Singapore

Highlighting the scenario-specific benefits of Singapore, the task force said in the paper: “Given that Singapore is already progressing on ammonia bunkering safety, regulatory and technology development activities, it is likely to be one of the first zero or near-zero carbon ammonia bunkering hubs, which increases the corridor’s chances of reaching its 5% target by 2030.”

The task force believed that developing a zero or near-zero carbon ammonia-powered green shipping corridor on this route could help accelerate the global decarbonisation of shipping, reduce emissions regionally, and generate benefits for Australia that support its national strategic priorities.

“A critical barrier to realising this green corridor, however, is the significant cost gap of running a ship on zero or near-zero carbon ammonia versus conventional marine fuel,” the paper noted. 

“The global production cost of zero or near-zero carbon ammonia is forecasted to be significantly more expensive than conventional marine fuel through at least 2030, and an independent, third-party assessment has been undertaken to further explore the cost gap ranges for this specific corridor.”

“This cost differential creates a substantial gap in the business case for green shipping corridors and is recognised as the main area where government intervention is likely to be required.”

Note: The position paper titled ‘Supporting the establishment of the Australia-East Asia iron ore green corridor’ can be viewed here.

Photo credit: Shaah Shahidh on Unsplash
Published: 2 April, 2024