TIME FOR AMMONIA?
Research shows that ammonia is likely to become the most competitive fuel through the 2030s. If half the sector is running on ammonia in the 2040s, then fleets still running on methanol or LNG are expected to have a 30 to 50 percent higher cost of operating. That is not commercially sustainable.
So why are people not jumping on the ammonia bandwagon as fast as they can? At UCL’s Energy Institute, our multidisciplinary team works to answer these types of questions. And the answer to who will move first seems to fall into six key areas:
1. Progressive investment
When governments make transition part of their industrial strategy, we see powerful shifts.
In Scandinavia, geographical suitability, domestic gas resources, engineering skills, and strong industrial policy aligned to see Norway and Sweden lead the LNG transition. Now, Scandinavian firms are leading the way again with firms like Höegh Autoliners ordering ammonia-ready vessels.
2. Existing carriers
While policy sets the stage, existing infrastructure and cargo types also shape who moves first, and a clear group of early adopters are those already carrying cleaner fuels as cargos.
It’s easier for a vessel to use its cargo as fuel than to start from scratch. It also simplifies crewing and reduces the energy supply chain, such as bunkering.
3. High-value cargos
Market dynamics also matter. Consumers are often willing to pay a premium for carbonneutral products, meaning vessels transporting high-value goods can absorb the cost of zero-emissions shipping more easily.
One initiative, ZEMBA (Zero Emissions Maritime Buyers Alliance), is already showing how buyer influence can accelerate change, and their first tender for low-emission shipping was won by Hapag Lloyd in 2024.
4. Geographical advantages
Some nations also already have a hydrogen advantage, typically places with high sun or wind that have good existing maritime infrastructure. Countries like Australia and Saudi Arabia are likely to become major hydrogen (or ammonia) producers, making fleet conversion easier to realize.
Services most suited to make this change are those that operate between just two ports, allowing vessel design and refueling to be optimized. For instance, BHP has recently signed contracts for two ammonia dual-fueled bulk carriers for the Australia to China iron ore route.
5. Diversified value chains
A particularly interesting scenario lies with multinational companies that operate vessels, and trade commodities, across multiple markets. These firms can spread the risk of decarbonization across their value chains.
A great example is Japanese import/ export firm Itochu, which has the flexibility to experiment with low-emission solutions and is now investing in ammonia at scale.
6. Disruptors
And finally, let’s not dismiss the power of the individual. History shows us that disruptors can reshape entire industries, just think Steve Jobs and the iPhone. While shipping has long been seen as a risk-averse sector, leaders are starting to emerge with a “let’s do this” mindset, such as Alex Saverys at CMB.
But what is the point of all this theory? I hope it will help companies identify whether they are in a position to move first. The evidence clearly shows that the transition to renewable energy is well underway, and those that get ahead of the game are likely to be the longterm winners.
This spotlight appeared in ON&T Magazine’s 2026 January Special Edition, The Future of Ocean Technology Vol. 6, to read more access the magazine here.
