CIP plans massive production of green ammonia for ships by 2030

“We believe ammonia will be the dominant green fuel by 2030.” At a time when many players in the maritime world are taking a cautious, even circumspect, approach to the future of carbon-free propulsion, some financiers appear to be making choices. This is the case with the investment fund Copenhagen Infrastructure Partners, and its vice-president Jens Joedal Andersen met Mer et Marine in Denmark. “We were founded in 2012 with the idea of ​​combining green energy with the needs of maritime transport.” Since then, CIP has established twelve funds, the first ever with a Danish pension fund investing in offshore wind energy in Britain. Other funds were quickly created to finance sustainable projects in Germany, the United States, Taiwan, Eastern Europe, India… In the middle of the pandemic, CIP launched the largest global fund dedicated to green energy and in 2021 a fund dedicated to Power -to-X was created.

Power-to-X is the use of green energy to convert materials into fuel or heat. In this case, green ammonia involves making the molecule from green hydrogen, obtained by hydrolysis with green electricity (of renewable origin) and nitrogen from the air.

CIP has one belief: “the determining factor will be hydrogen, everyone will want it, because it is part of the composition of new e-fuels”. That’s why the fund decided to move forward by securing sources for renewable hydrogen production around the world. “We know sun and wind well and are convinced that it is thanks to them that a large part of green hydrogen will be produced in the future.”

CIP experts therefore looked for areas that had a good solar or wind quota as well as access to the sea to transport the molecules produced. That’s why they plan to install large solar or wind fields that will supply electricity to hydrolysers to create hydrogen from water. The latter, thanks to the Haber-Bausch reaction, in combination with nitrogen from the air, will create ammonia, which can be liquefied and loaded on board specialized ships. “That’s why we chose locations close to the sea.”

CIP predicts 6 million tons of e-fuels per year by 2030

CIP currently has 17 locations under project: “In Europe we already have medium-sized projects where we have access to existing green electricity, in the United States we are working on a blue ammonia project (partly produced with renewable energy). but above all, we believe that the more remote locations will offer the most potential: Western Australia, Morocco, Mexico, Chile… there is a real race going on at the moment to find the best production locations,” says Jens Joedal Andersen.

CIP is raising funds to finance these projects, “and we should be able to make financial decisions by 2024-2025 at the latest because the first productions are planned for 2028.” And if there is one point that CIP is pushing for, it is on this timeline, “because this is the point that we deliver to the shipping companies. They must be able to count on this if they decide to invest in ships that run on ammonia.” And thus solve the well-known chicken-and-egg problem.

State of the art and logistics surrounding ammonia

But why such confidence in green ammonia? “Already because it is the only truly carbon-free fuel. It is clear that the energy transition of maritime transport will require multiple fuels depending on the type of ships, their operational profile and their age, but we truly believe that ammonia will become the main fuel for new construction by 2030. Its production is much easier than e-fuel alternatives as it does not require any carbon. Biogenic CO2 is needed to produce green e-fuels and this will not be easy to find to meet the enormous demand. The components ammonia, hydrogen and nitrogen are abundant or can be easily produced if green energy is available.”

CIP is closely monitoring the maritime world’s approach to ammonia, which has long been treated with caution due to its potential danger. Ammonia engines, both slow and fast, are under development, and some are already being tested. Shipping companies are beginning to rely on these technical developments when placing orders for new ships. Logistics are being set up and CIP has also decided to get involved by setting up a co-company with Seaspan to develop a bunkering service. “We are well aware that this is a major change in strategy for shipowners, but we are convinced that by guaranteeing volumes of green ammonia transported to ships, we will participate in the energy transition of maritime transport.”

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