WinGD Expects Ammonia Propulsion to Take Off in The Shipping Industry

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  • Ammonia-capable ships could make up one-third of newbuild orders by 2030
  • Swiss firm has sealed engine orders for 10 ships with ammonia propulsion
  • CEO calls on regulators to support R&D to lower capex for alternative fuels

Swiss engineering company WinGD is experiencing a rapid uptake of ammonia propulsion, having secured engine orders for 10 ammonia-capable ships of various types, CEO Dominik Schneiter told S&P Global Commodity Insights. Despite currently accounting for less than 1% of ships under construction, ammonia propulsion is expected to see a significant increase, potentially comprising one-third of newbuild orders by 2030, reports SP Global.

About the engine

WinGD is set to deliver its first ammonia-capable engine by March 2025, allowing the ship to be operational by the end of that year. Ammonia, a zero-emission fuel when produced sustainably, could become a leading marine fuel due to its alignment with the expansion of renewable hydrogen production. Commodity Insights forecasts ammonia bunker demand to rise from zero in 2023 to 60,500 b/d by 2030, and further to 2.5 million b/d by 2050.

While ammonia presents safety challenges due to its toxicity and corrosiveness, WinGD is collaborating with seafarers and classification societies to develop safe bunkering procedures. However, Schneiter noted that ammonia propulsion might not be suitable for passenger ships due to safety risks.

The International Maritime Organization (IMO) is expected to finalize safety bunker guidelines for new fuels like ammonia by the end of 2024. Meanwhile, IMO member states are working on new measures, potentially including a global levy on marine energy’s greenhouse gas emissions by 2025, to be implemented in 2027. Such measures could help bridge the cost gap between sustainable and fossil fuels.

Schneiter emphasized the need for regulatory support in R&D to lower capital expenditures for alternative fuel propulsion systems. Compared to conventional ships, ammonia-capable ships cost 20%-25% more. Further R&D could help reduce these costs, making ammonia propulsion more accessible. Schneiter noted that while the EU has funded green shipping technologies, similar initiatives at the IMO have been slow.

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Source: SP Global