Trafigura and Yara sign low-carbon ammonia for marine fuel deal
London (Quantum Commodity Intelligence) – Global commodity trader Trafigura and Yara International, the world's fourth-largest fertiliser company, have signed an agreement to collaborate on the development of the market for low-carbon ammonia in shipping, the companies announced Monday.
The shipping industry is viewed as one of the hardest to decarbonise due to its inherent technical and logistical challenges but is responsible for around 3% of global emissions.
Yara will supply low-carbon 'clean' ammonia to Trafigura while they will jointly explore research and development for ammonia as a marine fuel and the development of clean ammonia assets, including marine fuel infrastructure.
Yara produces roughly 8.5 million mt of ammonia annually and 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.
"Building clean ammonia value chains is critical to facilitate the transition to zero-emission fuels by enabling the hydrogen economy - not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," said Magnus Krogh Ankarstrand, President of Yara Clean Ammonia.
Trafigura has also backed the need for a global carbon levy on shipping fuels to be introduced by the International Maritime Organization, via a white paper published last September.
"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," said Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura in Monday's press release.
Hydrogen-based fuels have been widely mooted as a possible route to lower emissions and ammonia holds the advantage of being easier to handle and more energy-dense than the hydrogen it is derived from.
The clean ammonia will be of both the 'green' and 'blue' types, which are made from renewable electricity-based hydrogen and hydrogen from natural gas with carbon capture and storage, respectively.
