New Startup Bets Ammonia Can Be Used to Power Container Ships, but Challenges Remain

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Could ammonia be powering the container ships of the future?

A new startup called Amogy is betting that ammonia will soon compete with other fuel sources in powering container ships. The startup is based in New York and investors are taking notice, with over $139 million raised by a wide variety of investors that include Saudi Arabia and other countries around the world.

Amogy has been receiving a lot of attention over the past few months – and for good reason. Container ships are still very hazardous to our global climate with carbon emissions with some estimates saying ships contribute to as much as 3% of global greenhouse gases.

Most recently reported by Yahoo! Finance, Amogy’s newest round of funding will be used to solve one of the biggest issues facing making the transition from carbon-based fuels to alternatives: how to make ammonia more cost-effective to compete against traditional fuel sources. It’s predicted by Amogy’s leadership that ammonia could be cost-effective and on-par with current fuel sources by 2030 – just seven years from today.

Amogy CEO Seonghoon Woo said in a brief interview with Yahoo!:

“Ammonia has been discussed a lot, especially in the shipping industry, as a potential fuel because of its high energy density and availability. However, there has not been a technology converting ammonia to power efficiently and effectively. So that’s the solution that this company is bringing to the market for the first time.”

Like many alternative power sources, however, there are numerous roadblocks and challenges facing the transition.

First, the International Maritime Organization (IMO) has not yet regulated ammonia or approved it as a fuel source for container ships. There is a lot of untested waters that have yet to be touched with ammonia for these vessels. That’s a major roadblock that needs to be addressed.

Second, some scientists theorize that using ammonia as a fuel could lead to some situations where combustion causes high nitrogen emissions, which would defeat the purpose of using a environmentally-friendly fuel.

The shipping industry is under increasing pressure to reduce greenhouse gas emissions quickly.

IMO 2020 guidelines were implemented over the past decade to reduce sulphur emissions from container ships. Then, the IMO set a goal to half emissions by 2025 from 2008 levels, and then the private sector has also chimed in. Major private companies have started hiring environmentally-friendly shippers over those who have made little to no effort to reduce greenhouse gases.

Major shippers such as Maersk have taken note of the trend of greener shipping, so the prospect of ammonia looks exciting to them and many other shipping companies.