Can Ammonia Power the Shipping Industry?

For most of the last decade ammonia has been shipping's favourite answer to a question it could not otherwise answer. It contains no carbon, so burning it emits no carbon dioxide. It is already produced at industrial scale, already shipped around the world in specialised carriers, and already handled at ports by people who know what they are doing. Compared with hydrogen, which must be kept at minus 253 degrees Celsius, ammonia liquefies at a manageable minus 33 and stores at modest pressure. On paper it looked like the fuel that would get deep-sea shipping to zero.

The paper case has not translated. In the first half of 2026, DNV recorded 137 orders for alternative-fuelled vessels worldwide. Four of them were for ammonia. LNG took 73 and LPG and ethane took 55, up from just 15 the year before. Methanol, which was the darling of 2023 and 2024, took two. Exmar did take delivery of what it described as the world's first oceangoing dual-fuel ammonia vessel, which is a genuine milestone, but the orderbook is not following.

The question the carousel asks therefore has a more interesting answer than yes or no. Ammonia probably can power deep-sea shipping. Whether it will depends on three problems that are each solvable and none of which is solved, and on a regulatory decision that has been postponed.

 

A Fuel That Contains No Carbon

 

The chemistry is genuinely favourable and worth stating precisely. Ammonia is NH3. Burn it and the products are nitrogen and water. There is no carbon atom anywhere in the molecule, so there is no pathway by which combustion produces carbon dioxide. That is a harder guarantee than methanol or LNG can offer, both of which contain carbon and emit it.

Ammonia also has a volumetric energy density roughly half that of conventional marine fuel oil, which is poor but workable. A ship needs tanks about three times the volume for equivalent range once the practicalities are accounted for, which costs cargo space but does not make transoceanic voyages impossible the way hydrogen's density does. For bulk carriers and tankers, which have hull volume to spare, the trade is tolerable. For container ships, where every cubic metre is revenue, it is less so.

But the carousel's second slide carries the essential qualifier: the climate benefit depends on how the ammonia is made, and that turns out to be only the first of two qualifiers.

 

Not All Ammonia Is Clean

 

Virtually all ammonia produced today comes from natural gas or coal via the Haber-Bosch process, and ammonia production is one of the largest industrial sources of carbon dioxide on the planet. Burning grey ammonia in a ship engine simply relocates the emissions from the funnel to the factory, and in the case of coal-based production makes the total worse. Green ammonia uses renewable electricity to split water into hydrogen, then combines that hydrogen with nitrogen from the air. Blue ammonia uses fossil feedstock with carbon capture attached.

This much is widely understood. The second qualifier is not, and it is more troubling.

Ammonia is a nitrogen compound, and nitrogen chemistry produces its own greenhouse gas. Nitrous oxide has roughly 273 times the warming potential of carbon dioxide and persists in the atmosphere for more than 120 years. It forms directly in ammonia combustion, and it forms indirectly when ammonia that has slipped unburned through the engine, or leaked, vented or spilled during handling, breaks down in the environment.

The size of that effect is the single largest uncertainty in the entire ammonia proposition. The conversion rate from released nitrogen to nitrous oxide is poorly constrained: one prominent lifecycle assessment assumed 0.3 percent, while agricultural studies of nitrogen compounds suggest a range spanning 0.1 percent to 21 percent. Analysis summarised by the Environmental Defense Fund found that under low reactive nitrogen assumptions, e-ammonia delivers lifecycle greenhouse gas reductions of roughly 70 to 80 percent against very low sulphur fuel oil and blue ammonia around 30 to 60 percent. Above a conversion rate of around 5 percent, ammonia could emit more than the fuel oil it replaces. Blue ammonia is particularly exposed, because its carbon advantage is thinner to begin with.

There is an ecosystem dimension too. Reactive nitrogen released to air and water causes eutrophication and acidification, and the same analysis estimated ammonia could increase negative impacts on aquatic and terrestrial ecosystems by 35 to 65 percent relative to very low sulphur fuel oil. A fuel adopted to protect the ocean's climate function could degrade its water quality, which is an uncomfortable trade that the carbon-only framing hides entirely.

None of this is a reason to abandon ammonia. It is a reason to insist that engine design minimises slip, that aftertreatment handles nitrous oxide and nitrogen oxides rather than just the latter, and that regulation measures ammonia on a full greenhouse gas basis rather than a carbon dioxide basis. The IMO's move toward well-to-wake lifecycle accounting is what makes that possible in principle.

 

The Biggest Challenge Is Safety

 

Ammonia is acutely toxic. Concentrations that a crew member might encounter during a significant leak in an enclosed space can be fatal within minutes, and the exposure limits are measured in parts per million. This is a different category of hazard from the fuels shipping currently handles. Heavy fuel oil is filthy and flammable. Methanol burns with an invisible flame. Neither kills a person who walks into the wrong compartment.

That reality has shaped the regulatory response. The IMO issued interim guidelines for the safety of ships using ammonia as fuel as circular MSC.1/Circ.1687, finalised by the carriage sub-committee in September 2024, approved at MSC 109 in December 2024 and published in March 2025. They are goal-based and function-based rather than prescriptive, covering design, equipment, operations, bunkering, toxicity mitigation and crew protection, with the overarching requirement that an ammonia installation should be at least as safe and reliable as conventional oil-fuelled machinery. Amendments to SOLAS Chapter II-1 bring gaseous fuels including ammonia under the IGF Code, and an IGC Code update permits ammonia carriers to burn their own cargo.

Two things should be noted about this framework. The first is that the guidelines are interim and non-mandatory, and the IMO expects to refine them as operational experience accumulates, particularly on toxicity controls and emergency systems. That is the correct approach for a fuel nobody has run at scale, but it means early adopters are operating under rules that will change.

The second is training. Generic interim guidelines for training seafarers on alternative fuels were taken forward at MSC 110, and fuel-specific ammonia training has been working through the IMO's priority queue behind methyl and ethyl alcohol, with ammonia-specific training guidance emerging through 2026. A ship cannot be crewed safely by people trained on a different fuel, and the certification pipeline for ammonia-competent seafarers is years behind the vessel orderbook even at the orderbook's current modest size. This is not a footnote. It is one of the harder constraints on how fast the fleet could grow even if every other problem were solved tomorrow.

 

The Transition Needs More Than Fuel

 

The carousel's closing slide lists four requirements, and each is a separate industry that has to be built roughly in parallel.

Cleaner production means electrolysers, renewable generation and Haber-Bosch plants at a scale that does not currently exist for this purpose. The economics are dominated by electricity: it accounts for around two thirds of the levelised cost of the hydrogen, and hydrogen in turn accounts for about 92 percent of the delivered cost of the ammonia. Which means green ammonia is, essentially, a way of shipping cheap renewable electricity, and it is viable only where that electricity is very cheap indeed.

Safer engines and storage are arriving. Two-stroke ammonia engines from the major designers have moved from test beds to delivery, and the first dual-fuel vessels are in service. But the operating hours behind them are a rounding error against the millions of hours of experience the industry has with diesel, and reliability data takes years to accumulate.

Port infrastructure means ammonia bunkering, which exists almost nowhere. Ports that handle ammonia as cargo are not thereby equipped to transfer it as fuel to a ship with people aboard, and the safety case for bunkering in a populated port area is substantially harder than for cargo transfer at a dedicated terminal.

Trained crews is the constraint discussed above, and arguably the one least amenable to capital.

The reason the orderbook sits at four is that a shipowner contemplating an ammonia newbuild must bet that all four of these will be ready in the specific ports their ship will trade to, within the delivery window, at a price they can afford. LNG requires none of those bets, which is why it took 73 orders.

 

The Economics and the Regulation They Rest On

 

The cost picture has improved markedly and remains contingent.

Earlier estimates put green ammonia somewhere between 950 and more than 2,000 dollars per tonne. A recent assessment built around large-scale hydropower put production at around 515 dollars per tonne at the port, with a levelised cost of roughly 524 dollars delivered. On a compliance-adjusted basis under the IMO Net-Zero Framework as proposed, that analysis put green ammonia at 126.3 dollars per megawatt hour in 2030 against very low sulphur fuel oil at 116.1, with 2035 as the first year ammonia becomes the cheaper option, because fuel oil's compliance cost rises faster than ammonia's.

Two caveats sit underneath that forecast and both are substantial. The first is that the electricity assumption does the heavy lifting: the case was built on Grand Inga hydropower in the Democratic Republic of the Congo, where existing installed capacity is around 1,775 megawatts and the expansion that would supply ammonia at scale remains proposed rather than financed. The report itself concedes that ammonia demand alone is insufficient to justify that development in isolation.

The second is the one that matters most right now. The entire crossover depends on the IMO Net-Zero Framework proceeding as proposed, and the Framework's adoption vote was adjourned at an extraordinary session in October 2025, with talks scheduled to resume in late 2026. A weakened or delayed framework removes the compliance cost that makes ammonia competitive, and with it the business case for every green ammonia production project pursuing maritime offtake. That is almost certainly a significant part of why the orderbook thinned in the first half of 2026. Shipowners are not waiting for better engines. They are waiting to find out what the fuel will cost after regulation, and nobody can currently tell them.

 

So, Can It?

 

Yes, in the sense that matters technically. Ammonia burns, engines exist, the first vessels are sailing, and a safety framework is in place. There is no remaining question about whether a ship can cross an ocean on it.

The honest answer to the question as shipping actually faces it is more conditional. Ammonia works as a deep-sea fuel if green production reaches a scale and price that nothing yet guarantees, if nitrous oxide and ammonia slip are controlled tightly enough that the lifecycle benefit survives contact with real engines, if bunkering infrastructure appears in the right ports, if enough seafarers are trained to run it safely, and if a carbon price exists that makes any of it worth paying for. Each condition is plausible. The product of five plausible conditions is not a certainty.

What the 2026 orderbook shows is an industry that has moved from enthusiasm to due diligence, which is a healthier place to be even though it looks like retreat. LNG and LPG are winning orders because they are available now and the regulatory risk is lower, not because anyone believes they are the endpoint. Ammonia remains the most credible carbon-free candidate for the ships that cannot be electrified, and the carousel's final line is the right conclusion: its future depends on making the entire system work, not on the fuel.

 

Note: This article reflects the state of the sector as of October 2026, drawing on sources including DNV's Alternative Fuels Insight data for the first half of 2026, IMO circular MSC.1/Circ.1687 on the safety of ships using ammonia as fuel, Environmental Defense Fund analysis of reactive nitrogen emissions from the ammonia value chain, and published techno-economic assessments of green ammonia production costs. Cost forecasts depend on assumptions about the IMO Net-Zero Framework, whose adoption remains unresolved. A companion piece in this series covers green ammonia production and its agricultural applications in more detail.