Trafigura, Yara to jointly pursue clean ammonia opportunities

Singaporean/Swiss commodity trading company Trafigura and Norway-based ammonia player Yara International have signed a memorandum of understanding (MOU) to collaborate on the development and promotion of the use of ammonia as a clean fuel in shipping.

Under the MOU, the duo will also explore possible opportunities to work together on certain clean — green and blue — ammonia fuel infrastructure and market opportunities.

Both Yara and Trafigura have taken a number of steps to progress towards making the transition to a greener economy a reality. For the first time, the two companies intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain.

Specifically, Trafigura and Yara intend to collaborate in the following areas:

  • The supply of clean ammonia by Yara to Trafigura Group companies
  • Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
  • Development of new clean ammonia assets including marine fuel infrastructure and market opportunities.

“This agreement is another good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry,” Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, commented.

Building clean ammonia value chains is critical to facilitate the transition to zero-emission fuels by enabling the hydrogen economy… Demand and supply of clean ammonia need to be developed in tandem,” he added.

“There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential,” Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura, said.

Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and published a white paper on the need for a global carbon levy for shipping fuels to be introduced by the International Maritime Organization (IMO).

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Yara produces roughly 8.5 million tonnes of ammonia annually, employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity. The company recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.

Reducing shipping emissions is a vital component of the fight against global climate change, yet greenhouse gas (GHG) emissions from the global maritime sector are increasing. The Fourth IMO Greenhouse Gas study, published in August 2020, predicts that emissions could increase by as much as 130 percent by 2050 compared with 2008 levels. To reverse this alarming trend the ships in use, the fuels that power them and the related infrastructure all need to change as the industry transitions to low or zero-carbon maritime fuels.