Consortium Formed for Marine Transport of Green Ammonia
HMM, Lotte Fine Chemical, Lotte Global Logistics, POSCO, Korea Shipbuilding & Offshore Engineering and Korean Register of Shipping formed a consortium and signed a memorandum of understanding on May 25 for the purpose of marine transport and bunkering of green ammonia.
These days, the importance of ammonia is increasing as a green hydrogen carrier and an eco-friendly energy source. When hydrogen is transported after synthesis with ammonia, existing transport networks can be used as they are and the transport process entails almost no loss. In addition, ammonia is an eco-friendly fuel emitting no carbon dioxide.
According to International Maritime Organization regulations, greenhouse gas emissions from vessels must be halved from 2008 to 2050. The International Energy Agency said in its report on May 18 that ammonia is likely to account for 45 percent of the global ship fuel demand in 2050. The percentage is equivalent to 100 trillion won given the current ammonia price and the current market size.
At present, a European consortium and a Singapore-led multinational consortium are vying to take the lead in this market with huge growth potentials. The South Korean consortium is unprecedented in that the members are well-known companies sharing the same nationality and it covers all value chain stages ranging from green ammonia production and distribution to vessel development and operation.
The role of the consortium is particularly important in that South Korea has its own limitations in terms of large-scale green hydrogen procurement and green hydrogen import based on ammonia synthesis is a more viable option for it.
According to the MOU, the members will share and utilize their resources for better cooperation in the green ammonia market. Specifically, Korea Shipbuilding & Offshore Engineering will develop ammonia-fueled and bunkering ships and Korean Register of Shipping will be in charge of certification. HMM and Lotte Global Logistics will run the vessels, POSCO will produce green ammonia abroad, and Lotte Fine Chemical will transport, store and bunker the green ammonia.