Höegh Autoliners & Yara Clean Ammonia enter clean ammonia supply deal

Business Developments & Projects

November 2, 2023, by Aida Čučuk

Ammonia distributor Yara Clean Ammonia, a subsidiary of Yara International, and shipowner Höegh Autoliners, both Norwegian companies, have agreed on a future supply deal for clean ammonia.

Höegh Autoliners noted that the partnership follows separate initiatives in both companies in two important parts of the value chain, namely supply and demand.

In May 2023, the two companies signed a letter of intent (LoI) to partner around the supply, potential distribution and delivery for consumption of clean ammonia for the Höegh Autoliners’ new AuroraClass PCTC vessels. These vessels are expected to be the world’s largest and most environmentally friendly car carriers ever built, equipped to operate on zero-carbon ammonia and methanol.

As part of the LoI, the companies will also consider the supply of blue ammonia where up to 95% of the CO2- emissions are said to be captured and permanently stored.

According to Höegh Autoliners, both companies consider clean ammonia, produced either with renewable energy or from natural gas with CCS, as a future maritime fuel with high potential that will contribute to solving the greenhouse gas emission challenges associated with global maritime transportation.

Commenting on the partnership, Andreas Enger, CEO of Höegh Autoliners, stated: “This is exactly the type of collaboration that will accelerate a push towards net zero shipping in the deep-sea segment of the industry. For Höegh Autoliners, this represents another step towards full decarbonization of our customers’ supply chains, and we are pleased to collaborate with a strong Norwegian global player to meet this goal.”

To note, Norway has set targets for cutting emissions from domestic shipping by 50% by 2030, and In July 2023, the International Maritime Organization (IMO) adopted an ambition of zero emissions for international shipping by 2050.

Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said: “We aim at significantly strengthening our leading global position, unlocking the green and blue value chains and driving the development of clean ammonia globally. Building on Yara’s leading experience within global ammonia production, logistics and trade, Yara Clean Ammonia works towards capturing growth opportunities in net-zero fuel for shipping.”

“Together with Azane Fuel Solution, we’re developing the world’s first bunkering and distribution network for clean ammonia to supply ships with a net-zero fuel. We already have a global distribution network for ammonia and we’re working closely with port authorities worldwide to make the bunkering of clean ammonia available for deep-sea shipping.”

Currently, Yara Clean Ammonia has two world-scale ammonia plants under development in the U.S. Two green ammonia pilot projects are under construction and renewable energy is used to produce fossil-free ammonia. In addition, the distributor has several off-take agreements on green ammonia.

Höegh Autoliners and Yara are both members of the First Movers Coalition, a World Economic Forum-backed initiative focused on reducing emissions in the hard-to-abate sectors.

Through the membership, Höegh Autoliners said the company has committed to powering at least 5% of its deep-sea operations with green ammonia by 2030.

Regarding Yara International, which is one of the founding members of the First Movers Coalition, the company is said to have already cut emissions by more than 50% since 2005 and is targeting a further 30% emission cut by 2030. Yara is aiming at climate neutrality in 2050.

When it comes to Yara Clean Ammonia, it has committed to supplying clean ammonia to be used either as fossil-free shipping fuel, decarbonized fertilizers or as a hydrogen carrier.

Höegh Autoliners emphasized that the launch of the design of the Aurora Class vessels and the signing of contracts for the delivery of the first twelve Auroras, with the delivery of two every six months starting from H2 of 2024, is another decisive step on the company’s path to zero.

The Auroras will be the first in the PCTC segment to receive DNV’s ammonia and methanol-ready notations with the main engine provided by MAN and the bridge system supplied by Kongsberg Maritime, Höegh Autoliners said.