Ammonia could be a fuel of the future

In the context of rapid climate change, the idea of replacing oil and coal with renewable energy sources has become more relevant than ever. Even the world's factory, China, plans to become carbon-neutral by 2060. The United States has not only returned to the Paris Climate Agreement but has set a target to cut greenhouse gas emissions by 50% by 2030.

But does this mean that within a couple of decades fossil fuels will no longer be in demand? That might be the case if and only if energy-storage problems can be solved.

Currently, the more power you need, the larger the battery must be. Installing such batteries is difficult and requires the assistance of a licensed electrician. A solarstorage battery like this could cost more than US$5,000. Perhaps in the future, humanity will solve this problem, but this is not the case yet.

In the meantime, companies are exploring the possibility of using ammonia as an alternative source of energy.

This year, the Norwegian shipping company Grieg Maritime Group and Finnish engine and energy equipment manufacturer Wärtsilä announced plans to build an ammonia-fueled tanker. Another oil tanker with an ammonia engine is being developed as part of a multinational project led by Samsung Heavy Industries and has already received basic certification from Lloyd's Register, a London-based marine classification society.

Samsung Heavy Industries plans to commercialize the technology by 2025. Hyundai Mipo Dockyard is engaged in a similar development. Since October 2019, the shipbuilder has been working on an ammonia-based propulsion project with Lloyd's Register and German engine manufacturer MAN Energy Solutions.

According to the Ammonia Energy Association, ammonia could account for 25% of the marine fuel balance by 2050, with almost all new ships starting from 2044 running on ammonia.

Ammonia has several advantages over hydrogen. In particular, it is easier to transport - ammonia is stored at 33 Celsius, compared with the more logistically challenging -253 Celsius required to store hydrogen.

The only problem is that if ammonia is to be introduced into the energy system as a carbon-dioxide-free fuel, its cost must be at least competitive with that of other fuels such as hydrogen. Currently, the production cost of CO2-free ammonia is about $300 per metric ton, assuming a natural gas price of $3 per MMBtu.

If the cost of renewable electricity falls below $50 per megawatt-hour, the cost of producing CO2-free ammonia from renewable hydrogen may become lower than from natural gas. This matters because the more expensive the fuel is, the higher the prices for the products will be. As a result, inflation rises and consumability falls, which ultimately leads to a slowdown in the economy.