A new study funded under the NoGaps project investigates the pathways for commercializing ammonia-powered gas carriers. The project has also produced an initial vessel design. The objective of the NoGaps project is to develop M/S NoGaps – an ocean-going clean ammonia-powered gas carrier.
The way to commercialize ammonia-powered gas carriers by 2026
Reducing the costs and commercial risks of early ammonia-powered vessels is currently the main barrier to finding suitable and competitive finance for projects such as M/S NoGaps. However, the study has found several measures that could reduce the current price difference between ammonia and conventional gas and reduce commercial risks for ammonia carriers.
These include:
- Dual-fuel vessel design
- Competitive debt financing arrangement
- Operational efficiencies
- Fuel subsidies
- Governmental regulation
The most effective way to reduce the cost gap is to pull on several cost-reduction levers at the same time. The report presents a scenario in which the carrier runs on a route between the US Gulf and Northwestern Europe, bunkers US ammonia, applies EU’s Fit for 55 measures and IRA subsidies (US Inflation Reduction Act), and maximizes operational efficiencies. In this scenario the cost gap can be closed in 2026.
“This type of breakthrough is made possible by industry-wide and cross-industry collaboration, spanning the Nordic region."
Nina Egeli, Head of Program at Nordic Innovation
Nordic collaboration is necessary to reach zero-emission shipping
Nina Egeli, Head of Program at Nordic Innovation, highlights the key role of Nordic collaboration in this project:
“Not only has the NoGAPS project come up with an initial ship design which makes the development of the first-of-a-kind ammonia-powered gas carrier, the M/S NoGAPS, possible. The partners also demonstrate how the cost gap can be closed by outlining pathways to commercializing the vessel.”
“This type of breakthrough is made possible by industry-wide and cross-industry collaboration, spanning the Nordic region. There is a reason to believe that collaborative efforts extending across the Nordics, involving both private and public players, will be key to unlocking the vast potential for decarbonization and emission-cuts involved. With this happening, we could see an important impact by 2030 in line with the Nordic vision.”
This is supported by Jesse Fahnestock, Project Director at Global Maritime Forum:
“The successful completion of NoGAPS and its main deliverables, the M/S NoGAPS vessel design and its commercialization pathways, reveals the potential power of Nordic collaboration, both within the value chain, but also between Nordic governments through joint efforts such as Nordic Innovation. Commercialization of zero-emission shipping will come much faster if we pull every lever available to us, and Nordic governments and the global industry leaders in the region are among the best placed to do so."
Commercialization of zero-emission shipping will come much faster if we pull every lever available to us, and Nordic governments and the global industry leaders in the region are among the best placed to do so."
Jesse Fahnestock, Project Director at Global Maritimes Forum.
Collaboration between leaders from the industry has been important in producing the ship design. Claus Graugaard, CTO at Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping says:
"It's been a huge privilege collaborating so closely with some of the true Nordic pioneers in the maritime decarbonization space. The NoGAPS project has allowed some of the leading marine engine and technology manufacturers, alternative fuel producer and suppliers, class societies, ship designers and ship owner to work side by side, sharing knowledge and unleashing synergies that have helped in producing a novel ship design for a first-of-its-kind ammonia-powered gas carrier: the M/S NoGAPS.”
Paving the way for the world’s first ammonia-powered vessel
Ammonia has been identified as one of the leading potential zero emission fuels as it can be produced from renewable electricity. However, ammonia-powered vessels also present several challenges – technology, safety, fuels supply and commercial viability.
Read more about the NoGaps project
The aim of the Nordic Green Ammonia Powered Ships (NoGaps) project is to pave the way for the first ammonia-powered vessel and to have the ammonia-powered carrier, M/S NoGaps, in operation in the Nordic region during 2024-2025. On the longer term, the objective is to establish an infrastructure, operational and business models for ammonia-powered shipping in the region. The project consists of two phases:
- Phase one ran from 2020-2021 with the aim to develop a proof of concept on how to overcome the barriers to the adoption of ammonia as a zero-emission maritime fuel. The project focus was on safety, efficiency, sustainability, steady fuel supply chain and viability
- Phase two runs from 2022-2025 with the aim to produce a detailed ship design for an ammonia-powered carrier which lays the foundation for a shipyard tender and the construction of the vessel
As a first step of phase two, the project has conducted a feasibility assessment which identifies and evaluates ship design concepts that can achieve the design objectives and requirements. The intension of the assessment has been to evaluate the main design considerations, including the general arrangement and machinery.
