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Conventional Ammonia (Fossil Fuel-Based, e.g., Natural Gas):
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Hydrogen Production: The dominant method is steam methane reforming (SMR), where natural gas (CH₄) reacts with steam to produce hydrogen. This process, including the water-gas shift reaction, requires approximately 30–35 MJ/kg of ammonia (8.3–9.7 kWh/kg). This accounts for:
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Energy to heat reactants and drive the reaction.
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Energy for gas purification and compression.
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Nitrogen Production: Air separation to obtain nitrogen is less energy-intensive, typically 0.5–1 MJ/kg of ammonia.
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Haber-Bosch Synthesis: The synthesis loop (compressing gases, heating, and catalyzing the reaction) consumes about 5–7 MJ/kg of ammonia.
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Total Energy Input: Approximately 36–43 MJ/kg of ammonia (10–12 kWh/kg), including auxiliary processes like gas purification and ammonia liquefaction for storage/transport.
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Carbon Capture (Blue Ammonia): If carbon capture and storage (CCS) is added to reduce emissions, energy input increases by 10–20%, pushing the total to 40–50 MJ/kg.
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Green Ammonia (Renewable Energy-Based):
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Hydrogen Production: Electrolysis of water using renewable electricity (e.g., wind or solar) is more energy-intensive. Producing hydrogen via electrolysis requires 50–60 MJ/kg of ammonia (13.9–16.7 kWh/kg), depending on electrolyzer efficiency (typically 50–60 kWh/kg H₂).
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Nitrogen Production and Synthesis: These remain similar to conventional methods, adding 6–8 MJ/kg.
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Total Energy Input: Approximately 56–68 MJ/kg of ammonia (15.5–18.9 kWh/kg), reflecting the higher energy demand of electrolysis.
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Renewable Energy Efficiency: The energy input assumes renewable sources, which may have lower lifecycle energy losses compared to fossil fuels, but the direct electricity demand is higher.
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Energy Content: Ammonia’s LHV is 18.6 MJ/kg (5.17 kWh/kg). This is the theoretical energy released when ammonia is combusted (NH₃ + O₂ → N₂ + H₂O).
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Practical Efficiency:
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Combustion Engines/Turbines: In maritime engines or turbines (relevant for tankers), ammonia combustion efficiency is typically 30–45% due to losses from incomplete combustion, heat dissipation, and engine design. This yields 5.6–8.4 MJ/kg (1.55–2.33 kWh/kg) of useful mechanical energy.
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Fuel Cells: In ammonia-fed solid oxide fuel cells (SOFCs) or direct ammonia fuel cells, efficiencies can reach 50–60%, delivering 9.3–11.2 MJ/kg (2.58–3.11 kWh/kg) of electrical energy. However, fuel cells are less common in tanker applications as of 2025.
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Lifecycle Losses: Additional losses occur during ammonia storage, transport, and handling (e.g., refrigeration at -33°C or pressurization), reducing net energy output by 5–10%.
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Conventional Ammonia:
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Input: 36–43 MJ/kg (10–12 kWh/kg).
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Output (combustion): 5.6–8.4 MJ/kg (1.55–2.33 kWh/kg) in engines.
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Output (fuel cell): 9.3–11.2 MJ/kg (2.58–3.11 kWh/kg).
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Net Energy Ratio: The energy output is 15–25% of the input for combustion, or 20–30% for fuel cells. This means 75–85% of the input energy is lost in the production and conversion process.
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Green Ammonia:
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Input: 56–68 MJ/kg (15.5–18.9 kWh/kg).
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Output: Same as above (5.6–11.2 MJ/kg, depending on technology).
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Net Energy Ratio: The energy output is 10–20% of the input for combustion, or 15–25% for fuel cells, reflecting the higher energy cost of electrolysis.
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Conclusion: For both conventional and green ammonia, the energy required to produce ammonia far exceeds the energy it can produce as a fuel. The process is inherently energy-inefficient from a thermodynamic perspective, with 3–6 times more energy consumed in production than recovered in use.
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Storage and Transport: Ammonia is easier to store and transport than hydrogen, with a higher energy density (by volume) and established infrastructure for tankers.
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Decarbonization: Green ammonia, produced with renewable energy, enables low-carbon fuel for shipping, reducing reliance on fossil fuels.
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Versatility: Ammonia can be used directly as fuel or decomposed into hydrogen for other applications.
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Conventional Ammonia:
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As of 2025, production costs are approximately $400–600 per ton ($0.40–0.60/kg), driven by natural gas prices ($3–6/MMBtu), energy costs, and plant operations.
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Costs fluctuate with fossil fuel prices and regional factors (e.g., lower in the Middle East due to cheap gas).
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Blue ammonia (with CCS) costs $500–800/ton due to additional infrastructure.
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Green Ammonia:
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Costs are higher, ranging from $800–1,500/ton ($0.80–1.50/kg), due to expensive renewable electricity (e.g., $30–50/MWh for wind/solar) and electrolyzer capital costs.
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Costs are projected to fall to $500–800/ton by 2030 as electrolysis scales and renewable energy becomes cheaper (based on industry reports from 2023–2025).
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Ammonia’s energy content (18.6 MJ/kg = 5.17 kWh/kg) can be compared to alternative fuels:
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Marine Diesel: LHV of ~40 MJ/kg, priced at ~$0.50–0.80/kg (2025 bunker fuel prices). At 40 MJ/kg, diesel provides ~$0.0125–0.02/MJ.
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Ammonia: At 18.6 MJ/kg, conventional ammonia costs $0.021–0.032/MJ ($400–600/ton), while green ammonia costs $0.043–0.081/MJ ($800–1,500/ton).
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Energy Cost Comparison: Ammonia is 1.5–4 times more expensive per unit of energy than marine diesel, especially for green ammonia.
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Practical Value: In a tanker engine (40% efficiency), ammonia delivers ~7.4 MJ/kg of useful energy. For green ammonia at $1/kg, this is ~$0.135/MJ of mechanical work, far higher than diesel’s ~$0.031/MJ at $0.65/kg.
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The monetary cost to produce ammonia (especially green ammonia) is higher than the economic value of the energy it provides compared to alternatives like marine diesel.
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However, ammonia’s adoption in tankers is driven by regulatory and environmental factors (e.g., IMO 2050 net-zero goals, carbon taxes), not just energy cost. Green ammonia avoids CO₂ emissions, unlike diesel, justifying its premium in decarbonized shipping.
Final Answer
Global Maritime Forum
A new study from the UCL Energy Institute’s Shipping and Oceans Research Group and UMAS, commissioned by the Global Maritime Forum, concludes that the International Maritime Organization’s recently agreed Net Zero Framework (NZF) sends a strong market signal favouring ammonia dual-fuel ships—particularly from the mid-2030s onward. However, ongoing uncertainties in policy design are holding back early investments in e-fuels and alternative marine fuels.
The report uses a total cost of operation (TCO) model to evaluate various fuel pathways under the new regulatory landscape set by the IMO. While the NZF offers clearer direction for shipowners weighing fuel investments, several key policy elements—such as the zero and near-zero (ZNZ) reward mechanism and surplus unit (SU) trading dynamics—remain unresolved.
“Many stakeholders were waiting for clarity from the IMO to make long-term decisions,” said Dr Tristan Smith, professor of energy and transport at the UCL Energy Institute. “While some uncertainties remain, the case for investing in ammonia dual-fuel ships is now compelling—even under conservative policy projections. In contrast, e-fuel producers still lack sufficient policy certainty to move forward at scale without additional government support or market opportunities.”
The study finds that ammonia dual-fuel vessels strike the best balance of flexibility, competitiveness, and compliance from the mid-2030s, even without considering future rewards for ZNZ fuels. When likely developments in the reward structure are factored in, e-ammonia could emerge as a cost-effective compliance option as early as 2028.
In contrast, ships relying solely on conventional fuels are now projected to be uncompetitive across both the short and mid-term, according to the TCO analysis. Not only do they face higher carbon compliance costs, but they also limit owners’ ability to capitalise on potential upside from future credits or trading mechanisms.
The report also addresses the ongoing debate around liquefied natural gas (LNG) as a transitional fuel. It finds LNG to be cost-competitive in the near term—particularly into the late 2020s. However, its long-term viability is severely constrained by its carbon intensity and lack of compatibility with the sustainability unit (SU) system without the use of onboard carbon capture.
LNG-fuelled ships would need to rely heavily on low-emission drop-in fuels such as bio-LNG or e-LNG—or else face increasing compliance penalties. The volatility in natural gas prices and the uncertain trajectory of abatement technology add further investment risk to LNG pathways.
The study underscores the pivotal role of the NZF’s regulatory tools—including the remedial unit (RU) price, surplus unit (SU) trading, and the ZNZ fuel reward mechanism. These tools will ultimately shape the competitiveness of fuels, yet their final design is still in flux.
Because of these uncertainties, the authors advocate for fuel and vessel investment decisions to be based on a range of scenario analyses, rather than static assumptions.
For ports and bunker infrastructure investors, the analysis offers a strong endorsement for prioritising ammonia-readiness. With demand for ammonia-fuelled vessels projected to rise sharply after 2030—and possibly earlier with favourable policy evolution—early infrastructure investments could yield strategic advantages.
For fuel producers, the outlook is more mixed. Conventional fuel and LNG suppliers face growing uncertainty, while biogenic fuel producers have clearer demand signals, provided they can maintain price competitiveness.
