Belgian ship owner CMB Tech expects to take delivery of 11 vessels that can be powered by ammonia between this summer and next March, CEO Alexander Saverys said on Wednesday, as part of its "decarbonisation" plans.
"The first ammonia vessel will deliver this summer," Saverys told reporters on the sidelines of the Singapore Maritime Week conference.
The vessels include 10 Newcastlemax bulkers of 210,000 deadweight tonnes each being built at Qingdao Beihai Shipyard and one 1,400 twenty-foot equivalent unit (TEU) container vessel being built at China Merchants Industry Weihai, according to the company. These dual-fuelled vessels can use ammonia or diesel as fuel.
Last year, CMB Tech signed an off-take agreement for "green ammonia" produced by CEEC Hydrogen Energy in Jilin province and the shipper also owns a minority share in privately owned Jiangsu Andefu Energy Technology.
"The partnership with Andefu is we want to invest in the ammonia logistics chain in China because we need to make the connection between the production location and delivery to our ships," Saverys said.
"So we need trucks, rail, tank, and ammonia bunker barge. And Andefu has all of that."
For now, China is the only place where "green ammonia" is available, Saverys said, but he expects India to ramp up production next year.
"When you look at the production of renewable electricity in China, for instance, but also in India, you see the cost is coming down very fast," he said. "So more than ever, we need to invest in 'green ammonia' ships."
Looking ahead, Saverys said a greater focus on energy security in the wake of the Iran war will accelerate the so-called green transition in the long term. This, despite taxpayer-funded government subsidies masking the higher costs and supply uncertainty associated with it.
"We believe even more that this is the right way to go because eventually decarbonised products are going to be cheaper than fossil fuels," he said.
"Today, with the increase of the cost of diesel, it is already cheaper," he claimed.
(Reporting by Florence Tan and Siyi Liu; Editing by Kim Coghill, Baird Maritime)
