Government to help companies develop vessels fueled by ammonia, hydrogen

Japan, which relies on sea-based transportation for much of its food and natural resource needs, intends to start commercial runs of ammonia-fueled ships in 2028. © AP

TOKYO — The Japanese government will team up with local shipping lines and shipbuilders to develop new types of vessels fueled by ammonia or hydrogen, Nikkei has learned, with demonstrations of the carriers planned for 2026.

The government plans to invest about 30 trillion yen ($220 billion) by 2050 to achieve net-zero greenhouse gas emissions. The shipping sector is essential to Japan’s decarbonization efforts, as the country relies on sea vessels to bring much of its food and natural resources.

This spring, the Ministry of Land, Infrastructure, Transport and Tourism launched a public-private council tasked with decarbonizing the shipping industry. Nippon Yusen, Kawasaki Kisen and Imabari Shipbuilding, Japan’s largest shipbuilder, are participating. The council will work to expedite the use of “zero-emission ships,” which use ammonia or hydrogen as fuel and emit virtually no carbon dioxide.

Kawasaki Heavy Industries and other concerns will develop hydrogen engines, while Nippon Yusen and trading house Itochu are researching ammonia-fueled ships. The government will provide 35 billion yen worth of financial support over 10 years.

The government plans to begin demonstration operations of ammonia-fueled ships in 2026 and hydrogen-fueled vessels in 2027, with commercial operations targeted for 2028 for the former and 2030 or later for the latter.

Japan will also strengthen its domestic production base for ships. In tandem with the development of zero-emission ships, the government has made long-term and low-interest loans available for shipbuilders and shipping lines.

According to the ministry and the Japanese Shipowners Association, the construction of a zero-emission ship is estimated to cost about 10 billion yen, if about 100 such ships are built annually. That means an annual cost of about 1 trillion yen, with the total investment over the 25 years through 2050 being 25 trillion yen to 30 trillion yen.

Japan’s public-private effort comes with international competition intensifying. Germany’s Man Energy Solutions, a leading maker of marine engines, is shooting for 2024 to have an engine ready for ammonia-fueled ships. South Korea’s Samsung Heavy Industries is also developing an ammonia-fueled ship.

Yet there are challenges regarding the practical use of these ships. Ammonia, when burned, produces nitrous oxide, which has a greenhouse effect about 300 times that of CO2. In addition, hydrogen is 4.5 times the volume of heavy oil, the major marine fuel. Therefore, safety standards and operating rules must be developed for these ships, and costs must be reduced.

The ministry will support Japanese companies’ technological development, hoping Japan can lead the way for the shipping industry to decarbonize.

International marine shipping accounts for about 2% of the globe’s greenhouse gas emissions. The International Maritime Organization has set a goal of reducing emissions by 50% or more from the 2008 level by 2050. Japan, the U.S. and other economies have proposed shooting for net-zero emissions by 2050. The IMO is expected to reach a conclusion on the proposal in the summer of 2023.

Nikkei staff writers. July 7, 2022 18:06 JST

Source: Nikkei Asia, https://asia.nikkei.com/Spotlight/Environment/Climate-Change/Japan-aims-to-demonstrate-carbon-neutral-ships-in-2026, 3 September 2022

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