A promising solution for maritime shipping brings both opportunities and challenges.

A key sector for addressing the climate crisis is maritime shipping, which  accounts for nearly 3% of global greenhouse gas (GHG) emissions. While maritime shipping emissions are traditionally considered hard to abate, viable solutions for decarbonizing the sector have become clearer in recent years — such as efficiency measures on ships, wind propulsion, and batteries and fuel cells. 

As the technology pathways become clearer, the policy environment has increasingly supported transitioning toward a cleaner shipping sector. The International Maritime Organization (IMO), the global regulator of international shipping emissions, has adopted a goal of zero lifecycle (or “well-to-wake”) GHG emissions by 2050, with binding policy measures on pace for enactment this year. However, even the most optimistic forecasts indicate that a substantial share of the energy required for international shipping will still require fuels carried onboard vessels.

That is why it is necessary to find zero- or near-zero-carbon fuels that fit the unique needs of maritime shipping. One promising area is the development of “e-fuels” — low-carbon or carbon-neutral fuels synthesized using green hydrogen, which in turn is produced through electrolysis using additional renewable energy sources. Across much of the research on e-fuels in maritime shipping, ammonia has emerged as a viable option for the sector. However, widespread adoption will require addressing the challenges and risks associated with ammonia production.

Why is ammonia gaining momentum as a shipping fuel?

Ammonia has several qualities that make it a strong fit as a maritime shipping fuel. Most notably, ammonia does not contain carbon, so burning ammonia emits no carbon dioxide (CO₂). Ammonia is much more energy-dense than hydrogen and requires less storage space on board. (It is important to note, however, that ammonia’s volumetric energy density is lower than conventional fuels, so the baseline amount of fuel storage on ships will still need to increase.) 

Additionally, unlike hydrogen and liquefied natural gas (a fossil fuel increasingly used in shipping), ammonia does not require storage in cryogenic or high-pressure containers. Instead, ammonia can easily be stored in existing propane tanks. 

Ammonia derived from coal and natural gas is relatively abundant and affordable, and its production is well-established in the fertilizer industry. Global ammonia supply chains can be adapted to the shipping industry, although supplying fuel to ships from the shore (a process known as bunkering) will require major infrastructure investments.

Overall, there is growing momentum for ammonia across the shipping industry. Shipping companies have already started ordering ammonia-powered vessels, and analysts project ammonia will make up approximately 35% to 50% of the marine fuel mix by 2050. However, ammonia production does bring significant challenges and risks that must be addressed before widespread adoption.

Addressing ammonia’s safety concerns

It is important to note that ammonia is highly toxic to humans and marine life. Acceptable exposure limits are very low (20 to 50 ppm), and concentrations above 300 ppm can irritate the eyes and lungs. Acute exposure above 2000 ppm can be fatal to humans within half an hour, and any spill to the ocean could harm marine ecosystems. The high risk to health and the environment makes safety the top priority in ammonia fuel adoption.

Existing international rules do not yet cover ammonia. Effective regulations are still under development, and the IMO adopted interim guidelines for ammonia-fueled ships late last year. Under certain conditions, ammonia-fueled ships will be operable by 2026. Meanwhile, industry associations are evaluating the safety risks of ammonia and have found that measures like lowering fuel tank temperatures or restricting access to spaces containing ammonia can mitigate risk to acceptable levels.

Challenges to scaling up green ammonia 

While burning ammonia emits no CO₂, ammonia production is still emissions-intensive. Currently, ammonia relies mainly on reforming methane, a process that produces significant CO₂ emissions and thus is labeled “grey ammonia.” Methane reforming produces the hydrogen needed for the Haber-Bosch process, which combines the hydrogen with nitrogen from the air to produce ammonia. Global grey ammonia production is responsible for roughly 450 million tons of direct CO₂ emissions per year, or around 1.2% of global emissions. The IEA estimates that on average, each ton of grey ammonia production emits 2.4 tons of CO₂, slightly more than a passenger car in the United States emits in half a year.  Without changes in production methods, the use of grey ammonia on ships would simply shift emissions up the supply chain. 

Producing green ammonia, on the other hand, involves synthesizing the hydrogen via water electrolysis using additional renewable electricity. While the technology is proven, the scale of deployment does not meet current demand. Today’s global production capacity is about 200 million tons per year. Meeting the projected 2050 demand for maritime shipping will require at least 225 million tons per year Additionally, meeting the sector’s decarbonization goals will require significantly scaling up ammonia production while transitioning towards green ammonia.  

Zero CO₂ doesn’t mean zero emissions

Burning ammonia does not emit CO₂; however, without the proper equipment and precautions, it can emit other harmful gases.

In theory, harmless nitrogen gas is the only emission associated with burning ammonia. In practice, however, combustion in ship engines can yield nitrogen oxides (NO and NO₂), which are harmful to health and cause acid rain — and nitrous oxide (N₂O), a greenhouse gas with a global warming potential 273 times greater than CO₂. Ammonia also requires a high ignition temperature, and any unburned ammonia can escape through the exhaust. For every gram of ammonia fuel consumed, every milligram of N₂O released from ammonia-fueled engines would reduce by around 25% the climate benefits of switching from fossil fuels to green ammonia. 

Furthermore, ammonia emissions also reduce air quality by significantly contributing to the formation of particulate matter (PM2.5). It has been estimated that ammonia emissions from agriculture contribute to around 30% of PM2.5 formation in the United States and 50% in Europe. Unburned ammonia emissions from shipping could exacerbate this problem.

Managing these risks will require new ship engines that optimize efficiency while minimizing emissions — and manufacturers are already developing solutions. For example, a project in the United Kingdom secured 6.7 million USD to develop high-performance and low-emission engines and fuel cells; and leading marine engine manufacturers have initiated full-scale testing for large ammonia engines. 

Closing the price gap between green ammonia and fossil fuels 

Green ammonia is currently two to three times more expensive to produce than regular ammonia. As of early 2025, heavy fuel oil (HFO) prices ranged between 500 and 600 USD per ton, compared with green ammonia at 885 to 1,050 USD per ton. However, replacing conventional fossil fuels will require the equivalent of more than twice the amount of ammonia. In other words, green ammonia would cost between 1,900 to 2,250 USD for each ton of HFO replaced, amounting to a price gap of 1,400 to 1,650 USD per ton.  

However, the price gap and production costs are projected to decrease as the technology for green ammonia matures and scales up. Policy support like carbon pricing and subsidies can help accelerate the transition, along with carbon emission trading mechanisms like the European Union Emissions Trading System (EU ETS). Some estimates show that such policy support could help achieve price parity between green ammonia and current fossil fuels between 2030 and 2035.

According to recent analyses by the Getting to Zero Coalition, reaching significant adoption of ammonia and other zero-emission fuels will require a carbon price of around 100 USD per ton of CO₂ by the early 2030s. In practice, implementation could involve an IMO-led global levy or regional measures like the EU ETS. 

Beyond carbon pricing, other incentives are gaining traction, including fuel subsidies or tax credits for green ammonia, government-backed R&D funding, and co-financing for pilot projects.  For example, under the European Union’s FuelEU Maritime Regulation, until 2033, each unit of renewable fuels like green ammonia will count twice toward a ship’s GHG intensity reduction targets.

Advancing cross-sector collaboration and policy implementation

Ultimately, widespread adoption of ammonia will require close collaboration between governments, industry leaders, and research institutions. Given ammonia’s inherent health and environmental risks, unified standards and protocols are necessary to ensure it is handled and used as fuel safely. Joint industry projects and pilot programs like the Castor Initiative, Norway’s Green Shipping Program, and the ammonia bunkering trials in the Asia-Pacific aim to solve challenges around safety, infrastructure, and technology.

Policy support is another key enabler. The IMO’s 2023 greenhouse gas strategy created a long-term mandate that pushes the industry towards fuels like green ammonia. The transition will require big investments in technology, infrastructure, and supply chains, which can be de-risked with the right balance of carrots (like incentives, funding, and support for research and development) and sticks (like emissions regulations, fuel standards, and carbon prices). Good policy implementation will bolster the ongoing innovations and partnerships, allowing ammonia to mature from a promising concept to a practical, scalable solution for maritime decarbonization.