Euronav appears to be pinning its hopes on ammonia as a future fuel, announcing a Joint Development Program (JDP) with Hyundai Heavy Industries (HHI), DNV, and Lloyd’s Register for a series of dual-fuel VLCCs and suezmaxes powered by the hydrogen-based fuel.
Euronav joins Höegh Autoliners, DFDS and various other operators in considering re-tooling for ammonia (NH3), a chemical which combines hydrogen – more than is contained within a single hydrogen (H2) molecule – and nitrogen.
In this ‘carrier’ form, ammonia’s storage considerations can be considered much more practical than ordinary hydrogen; it boils at −33.34°C, versus hydrogen which must be kept at -252.87⁰C, stored at extremely high pressures, or more likely both. Ammonia shares hydrogen’s advantage of being usable in fuel cells, potentially doubling the efficiency with which electricity is generated on board.
“Shipping is entering an era of rapid technological developments and increasing environmental efforts demanding strong stewardship,” said Hugo de Stoop, Euronav CEO. “Working with key partners toward the safe transport and commercialization of new technologies will be instrumental in delivering benefits for the wider marine industry. This partnership will accelerate the development and adoption of ammonia as one of the key solutions for the shipping sector.”
Breakthroughs in Ammonia
The news emerges at around the same time that engine manufacturer Wärtsilä has completed full-scale engine tests with ammonia at its laboratory in Vaasa, Finland, using a fuel mixture with 70% ammonia content, and another engine running purely on hydrogen.
Subsequent to the tests, Wärtsilä announced it is expecting to be able to have an engine running fully on ammonia before the year is out, as well as bringing a commercially available pure-ammonia fueled engine online during 2023. For those operators who can make it commercially viable, Wärtsilä is expecting to be able to offer a pure-hydrogen engine by 2025.
“These are milestone moments in Wärtsilä’s transition to future fuels,” said Håkan Agnevall, CEO of Wärtsilä. “The energy and marine industries are on a decarbonization journey, and the fuel flexibility of the engines powering these sectors is key to enable the transformation.”
Euronav currently has three suezmaxes on order at a cost of $199.2m, scheduled for delivery between Q3 2023 and Q1 2024. It has also taken over two VLCC newbuilds whose owners were unable to execute the contracts, as well as exercising an option on a third.
In tankers, the orderbook-to-fleet ratio is historically low, but strengthening container and bulk carrier newbuilding activity is taking up yard space, limiting the potential number of tankers which could be built, and creating favorable conditions for Euronav’s newbuilds.
Compounding this, recently there has been considerable uncertainty over the eventual fuels consensus, and fear over ‘stranded assets’ – something which, there is evidence to suggest, has been preventing some owners from ordering new vessels over the last year.
To counter this, Euronav will gradually increase the readiness of its vessels to be converted into fully-dual-fuel ammonia-powered ships over time, but the vessels will retain the possibility of converting to operate with LNG instead. While today’s LNG is far from green, the move need not be cynical, as bio-LNG, derived from natural processes, could be used in its place, and is chemically identical to its fossil-derived sibling.
“Shipping is at the start of an intense period,” said Euronav in a statement. “It needs to apply new technologies, while simultaneously addressing challenging emission reduction objectives and maintaining the highest safety standards.
“The Joint Development Program brings together specialist parties to help accelerate these technological advancements. The program will ensure that Euronav and its partners gain control, yet retain flexibility in constructing future specifications for a new generation of crude tankers.
“Emissions compliance is critical to Euronav’s stakeholders. And with shipbuilding capacity likely constrained for the construction of large crude tankers until at least 2025, Euronav believes this will deliver the company a competitive advantage within its already established sustainability structure.”