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1、Supplied by Pilbara Ports AuthorityFuelling the decarbonisation of ironore shipping betweenWestern Australia and East Asia with clean ammonia Green shipping corridor feasibility assessment2Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaTab
2、le of contentsAcronyms and glossary 4Acronyms 4Glossary 5Endorsements 6Acknowledgements 7Disclaimer 8Executive summary 10Background and introduction 151.1 Green shipping corridors and why they matter 161.2 The Western Australia-East Asia iron ore green corridor opportunity 171.3 Report objectives an
3、d approach 18Defining and exploring a decarbonisation scenario for the corridor 202.1 Applying the scenario to the Western Australia-East Asia iron ore corridor 222.1.1 Demand for zero-emission cargo transport 222.1.2 Required number of zero-emission vessels and clean fuel volumes 23Feasibility eval
4、uation 263.1 Vessels 273.1.1 Initial deployment 273.1.2 Vessel availability 35Supplied by BPH3Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia3.2 Fuel 373.2.1 Clean ammonia fuel availability 373.2.2 Enabling mechanisms 473.3 Bunkering 513.3
5、.1 Ammonia bunkering readiness in Singapore and the Pilbara 513.3.2 Tradeoffs between Singapore and Pilbara bunkering 53Appendix 574.1 Vessel and voyage assumptions 584.2 List of relevant planned Australian clean ammonia projects 604.3 Detailed risk rating assessment for initial clean ammonia-powere
6、d vessel deployment in 2028 624.4 Corridor vessel age distribution and turnover projections 684Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaAcronyms and glossary Acronyms AiP Approval in PrincipleAREH Australian Renewable Energy HubBAF B
7、unker Adjustment FactorCAPEX Capital ExpenditureCCS Carbon Capture and StorageCfD Contract for DifferenceCII Carbon Intensity IndicatorCOA Contract of AffreightmentEEDI Energy Efficiency Design IndexEOI Expression of InterestETC Energy Transitions CommissionEU ETS European Union Emissions Trading Sc
8、hemeFID Final Investment DecisionGCMD Global Centre for Maritime DecarbonisationGMF Global Maritime ForumGO Guarantee-of-OriginGtZ Getting to Zero CoalitionGW GigawattH2 HydrogenHFO Heavy Fuel OilIEA International Energy Agencykg KilogramLCA Life Cycle AssessmentLCOP Levelised Cost of ProductionLNG
9、Liquified Natural GasLOI Letter of IntentICS International Chamber of ShippingIFO Intermediate Fuel OilIGF Code International Code of Safety for Ships using Gases or Other Low-flashpoint FuelsIRENA International Renewable Energy AgencyIMO International Maritime OrganisationMCR Maximum Continuous Rat
10、ingMoU Memorandum of UnderstandingMPA Maritime and Port Authority of SingaporeMPP Mission Possible PartnershipMt Million tonnesNGO Non-Governmental OrganisationNH3 Ammonianm Nautical mileOEM Original Equipment ManufacturerPPA Pilbara Ports AuthoritySGMF Society for Gas as a Marine FuelSOLAS Internat
11、ional Convention for the Safety of Life at SeaSTCW International Convention on Standards of Training,Certification and Watchkeeping for SeafarersSTS Sector Transition StrategySZEF Scalable Zero-Emission FuelUMAS University Maritime Advisory ServiceUN United Nations5Fuelling the decarbonisation of ir
12、on ore shipping between Western Australia and East Asia with clean ammoniaGlossary Clean ammoniaLow and zero-carbon ammonia.This umbrella term includes both“green”ammonia,produced with electrolytic hydrogen,and“blue”ammonia,produced from conventional hydrogen with applied carbon capture and storage.
13、Zero-emission vessels and fuelsVessels and fuels with the potential to achieve zero-or near-zero greenhouse gas emissions on a lifecycle basis.See the Getting to Zero Coalitions definition of zero carbon energy sources for further clarification.Ammonia-powered vesselsVessels with the ability to use
14、ammonia as their primary fuel.Clean-ammonia-powered vesselsVessels that operate on clean ammonia as their primary fuel.“Upper envelope”of clean ammonia demandThe amount of clean ammonia needed to power the full zero-emission fleet on the corridor,used for stress testing the fuels potential to contri
15、bute to the greening of the route.Port regionsThe geographical focus of this report covers seaborne trade of iron ore between Western Australia and the following groups of ports in East Asia:Port region 1:Bayuquan,Caofeidian,Caojing,Changzhou,Dalian,Dandong,Dongjiakou,Fangcheng,Huanghua,Jingtang,Kem
16、en,Lanshan,Lianyungang,Liuheng,Majishan,Ningbo,Qingdao,Rizhao,Shanghai,Tianjin,Zhangjiagang,Zhanjiang Port region 2:Gwangyang,Onson,Pohang,Pyeongtaek,Ulsan,Yeosu Port region 3:Chiba,Fukuyama,Higashiharima,Hirohata,Ichihara,Kashima,Kawasaki,Kisarazu,Kobe,Kure,Mizushima,Oita,Tokuyamakudamatsu,Tokyo Ba
17、y,Yokohama Port region 4:Kaohsiung,Mailiao,Tiachung6Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaEndorsementsThis report is based on analysis by the Energy Transitions Commission,on behalf of the Australia to East Asia Iron Ore Green Cor
18、ridor Consortium,a collaboration between the Global Maritime Forum,BHP,Rio Tinto Shipping(Asia)Pte.Ltd.,(Rio Tinto),Oldendorff Carriers GmbH&Co(Oldendorff Carriers)and Star Bulk Carriers Corp.(Star Bulk).“Through this collaboration with the Global Maritime Forum and the consortium members,BHP is ple
19、ased to see that the rigorous,data-led analysis of this study indicates the feasibility of using clean ammonia on vessels sailing through the West Australia to East Asia corridor.In line with our net zero ambitions,we seek to influence this supply chain,with our ecosystem partners,by creating demand
20、 for low-and zero-GHG emission fuels and energy efficient vessels.”Rashpal Bhatti,Vice President Maritime and Supply Chain Excellence,BHP“The West Australia East Asia iron ore Green Corridor represents a great opportunity to aggregate green fuel demand and supply in support of the industrys journey
21、towards net-zero in this major trade lane.As we build on the study to realise a safe and economic green shipping corridor,public-private partnership is key to bring this project to life.Rio Tinto remains committed to collaborating with value chain partners in support of this initiative as we work to
22、 deliver our climate commitments on shipping.”Laure Baratgin,Head of Commercial Operations,Rio Tinto“Being one of the founding members of the West Australia to East Asia iron ore Green Corridor Consortium was an excellent opportunity for Oldendorff Carriers to collaborate and share perspectives with
23、 the other Consortium members on the feasibility of reducing emissions on this strategic iron ore trade.We are pleased to join in sharing this feasibility assessment to show how a well-considered Green Corridor can facilitate our collective desire to decarbonize shipping with an alternative fuel.Whi
24、le outside the scope of this report,the safety concerns and environmental risks of ammonia have yet to be adequately addressed.As the safety of our crew is paramount,these challenges must be overcome to enable adoption.”Scott Bergeron,Managing Director Global Engagement&Sustainability,Oldendorff Car
25、riers“Working closely with our business partners to assess the feasibility of green fuels and technologies is a core pillar of Star Bulks strategy.This study has allowed us to examine the potential for the demand,supply,and bunkering of clean ammonia in the West-Australia East Asia corridor,an impor
26、tant trade route for our larger vessels.Through this work,we aim to complement parallel efforts of the industry to tackle other challenges related to ammonia as a marine fuel,including safety protocols and new engine designs,and to help advance the sectors understanding on the pathway to a greener f
27、uture.”Charis Plakantonaki,Chief Strategy Officer,Star Bulk 7Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaAcknowledgements About the Global Maritime ForumThe Global Maritime Forum is an international not-for-profit organisation dedicated
28、 to shaping the future of global seaborne trade to increase sustainable long-term economic development and human wellbeing.About the Australia to East Asia Iron Ore Green Corridor ConsortiumThe Australia to East Asia Iron Ore Green Corridor Consortium is a collaboration between the Global Maritime F
29、orum,BHP,Rio Tinto,Oldendorff Carriers and Star Bulk Carriers,that was launched in April 2022,to assess the development of an iron ore Green Corridor between Western Australia and East Asia.About the Getting to Zero Coalition Iron Ore Green Corridor Task ForceMembers of the Getting to Zero Coalition
30、 and leading Australian shipping and energy stakeholders formed a Task Force,convened and chaired by the Global Maritime Forum,to support the development of the Western Australia-East Asia Iron Ore Green Corridor.Its Members are BHP,BP,Bureau Veritas,Cargill,ClassNK,the Clean Energy Finance Corporat
31、ion,Fortescue Future Industries,Intercontinental Energy,Lloyds Register,Maritime Industry Australia Ltd,NYK Line,Oldendorff Carriers,Pilbara Ports Authority,Rio Tinto,Scaling Green Hydrogen Cooperative Research Centre Bid,Star Bulk,Woodside Energy,Yara Clean Ammonia.About the Energy Transitions Comm
32、issionThe Energy Transitions Commission(ETC)is a global coalition of leaders from across the energy landscape committed to achieving net-zero emissions by mid-century in order to limit global warming to well below 2C and as close as possible to 1.5C.Our Commissioners come from a range of organisatio
33、ns energy producers,energy-intensive industries,technology providers,finance players and environmental NGOs which operate across developed and developing countries and play different roles in the energy transition.This diversity of viewpoints informs our work:our analyses are developed with a system
34、s perspective through extensive exchanges with experts and practitioners.Our ambition is to inform the decisions of public and private decision-makers and support the leaders at the forefront of climate action to speed up the deployment of low and zero-carbon solutions.Authors Global Maritime Forum:
35、Joe Boyland,Marieke Beckmann,and Jesse Fahnestock Energy Transition Commission:Jason Martins,Mark Meldrum,and Evgeniia Mingaleeva 8Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaDisclaimerPresentation of information and data and forward-lo
36、oking statements This document contains forward-looking statements which make assumptions,including about long-run demand for iron ore in East Asia,levels of and potential constraints to clean ammonia-powered vessels deployment,and clean ammonia fuel and bunkering availability based on a combination
37、 of independent and new analysis by the Energy Transitions Commission.These assumptions are adopted to seek to assess the feasibility of implementing an iron ore green corridor between Western Australia and East Asia with clean ammonia as a fuel and shall be used for this purpose only.Except as requ
38、ired by applicable regulations or by law,neither ETC,Global Maritime Forum nor the Consortium members undertake to publicly update or review any forward-looking statements,or other content in this document,whether as a result of new information or future events.The statements in this document do not
39、 represent guarantees or predictions of future financial or operational performance and involve known and unknown risks,uncertainties and other factors,many of which are beyond the control of ETC,Global Maritime Forum or the Consortium members and which may cause actual results to differ materially
40、from those expressed in the statements contained in this document.Readers are cautioned not to place reliance on any forward-looking statements or graph-based projections.Numbers presented may not add up precisely to the totals provided due to rounding.Due to the inherent uncertainty and limitations
41、 in measuring greenhouse gas(GHG)emissions and operational energy consumption under the calculation methodologies used in the preparation of such data,all GHG emissions and operational energy consumption data or references to GHG emissions and operational energy consumption volumes(including ratios
42、or percentages)in this document are estimates.There may also be differences in the manner that third parties calculate or report GHG emissions or operational energy consumption data compared to the approach in this document,which means that third-party data may not be comparable to the data or infor
43、mation in this document.Reliance on third party information The views expressed in this document contain information that has been derived from publicly available sources that have not been independently verified by the Consortium members.No representation or warranty is made as to the accuracy,comp
44、leteness or reliability of the information.This document should not be relied upon as a recommendation or forecast by any of the Consortium members.Use of this document and no reliance This document has been prepared to assess the feasibility of implementing an iron ore green corridor between Wester
45、n Australia and East Asia with clean ammonia as a fuel.ETC and Global Maritime Forum request that any references to this document are appropriately attributed.The Consortium members make no express or implied warranty or representation in relation to any information or data contained in this documen
46、t,and to the greatest extent permitted by law,exclude any liability in negligence or otherwise for any loss arising from any use of this document or any other information or material comprised of or derived from any content of this document.9Fuelling the decarbonisation of iron ore shipping between
47、Western Australia and East Asia with clean ammoniaMaps and bordersThis publication and any map included herein are without prejudice to the status of or sovereignty over any territory,to the delimitation of international frontiers and boundaries and to the name of any territory or area.Supplied by P
48、ilbara Ports AuthorityFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia10Executive summaryThe Next Wave report by the Getting to Zero Coalition identified the iron ore shipping routes from Western Australia to China and Japan as strong candi
49、dates for first-mover green shipping corridors,with favourable conditions for early action and the potential to have a large impact on the decarbonisation of the sector.An accompanying pre-feasibility assessment found that clean ammonia “green”ammonia,produced with electrolytic hydrogen,and“blue”amm
50、onia,produced from conventional hydrogen with applied carbon capture and storage would be the most likely fuel to power the green corridor.This study takes the findings of the earlier pre-feasibility study as a point of departure and assesses the feasibility of implementing an iron ore green corrido
51、r between between Western Australia and East Asia with clean ammonia as a fuel.The study considers the feasibility of a scenario where clean ammonia-powered vessels are first deployed in 2028 and then ramped up following an S-shaped curve to full decarbonisation in 2050.It attempts to answer three q
52、uestions:Vessels:Can ammonia-powered vessels be put on the water when needed?Fuel:Could enough clean ammonia be available to power these vessels?Bunkering:Could ammonia bunkering be available in Singapore and/or the Pilbara region of Western Australia?%decarbonisationYearKICK-OFFRAMP-UPSCALE-UPColla
53、boration unlocks clean ammonia supply,with book and claim as back-upVesseldesign andinvestmentcase inplaceNewbuildammonia-poweredvessels introduced IMO safety regulations and standards in place Ammonia bunkeringavailable in Singapore and the PilbaraRetrofits or early retirements completethe transiti
54、onAustralian clean ammonia able to meet full demand202520282027203020352050Executive summaryFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia11Vessels Our assessment suggests it could be feasible to get ammonia-powered bulk carriers on the w
55、ater by 2028.Based on current activity,key technologies including suitable engines and regulations including International Maritime Organisation safety guidelines covering ammonia-powered vessels should be in place on time.However,some risks would need to be mitigated over the coming years to succes
56、sfully move forward,most notably:Safety case for use of ammonia as a marine fuel validated and accepted,with suitable regulations in place:There is currently limited clarity about when the IMO and other relevant standards-setting bodies will pass regulations for the safe operation of ammonia-powered
57、 ships,which are key for their large-scale adoption.Clarity should be provided as soon as possible,and efforts intensified to develop these regulations.To support their development and create the necessary confidence among stakeholders,ammonia-powered vessel pilots,risk assessments,and safety studie
58、s will need to be progressed over the coming years.Investment case:Although not assessed in detail in this report,it is expected that there will be a significant cost gap between clean ammonia-powered and conventionally-fuelled vessels for the foreseeable future.Additional policy action over the com
59、ing few years will be essential to create a viable investment case for ordering ammonia-powered vessels on the corridor.Availability of a suitable design for an ammonia-powered bulk carrier:Given normal lead-in times for building ships,a suitable design for an ammonia-powered bulk carrier needs to b
60、e ready by 2025 at the latest.While several projects are ongoing globally to bridge this gap,stakeholders on the corridor should come together to request or jointly advance a design for the corridor.Crew upskilling:It will be essential that seafarers are trained to safely operate ammonia-fuelled ves
61、sels.Progress is being made in this area,but to enable ammonia as a marine fuel at scale,as on the corridor,it will be crucial that the International Convention on Standards of Training,Certification and Watchkeeping for Seafarers(STCW)is updated to include ammonia when it is reviewed over the comin
62、g years.Shipyard availability:With many of the large Asian shipyards already having limited berths available for 2025/2026,it may be challenging to secure a slot to have ships built by 2028.To help maximise the chance of securing a yard slot,shipowners should consider ordering vessels as soon as fea
63、sible.Following initial kick-off,23 clean ammonia-powered vessels would need to be operational on the corridor by 2030,81 by 2035,and roughly 360 by 2050 to meet the scenario.Provided the right economic conditions are in place and sufficient shipyard slots available,evidence suggests this scale up s
64、hould be feasible.The study finds that enough vessels will be retiring to enable the introduction of most of the clean-ammonia vessels required,with limited need for retrofits or early retirements.If orders are placed over the coming years,almost all clean ammonia-powered vessels on the corridor up
65、to 2035 could be deployed in this way.Executive summaryFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia12Fuel Enough clean ammonia will likely be available to meet the corridors near and long-term requirements,even when accounting for deman
66、d from other sectors and uncertainties.Assuming clean ammonia production scales up as expected,the corridors long-term fuel demand could be fully met by Australian production,which is estimated to reach 52 million tonnes by the 2030s,or even by production in the Pilbara specifically,which is likely
67、to reach at least 9 million tonnes in this period.Should Australian production,however,not scale up or reach the cost levels expected,other production locations globally would be able to supply clean ammonia for import to Australia,Singapore,or another bunkering location on the route.There is less c
68、larity about the volumes of clean ammonia that will be available in the corridors kick-off period between 2028-2030,since most production projects are still in development and start-up dates,therefore,to be determined.Nonetheless,the study identifies five potential pathways for the corridor to secur
69、e the required supply in this period:In the first four cases,to meet production projects requirements and access competitively priced fuel,actors on the corridor may need to consider joint offtakes with early movers in other sectors,such as fertiliser and power generation.Securing clean ammonia for
70、this shipping corridor is,therefore,less likely to be a matter of competition than one of collaboration.In parallel,policy and regulatory support will be needed to help production projects achieve final investment decision in a timely fashion.This support could take the form of Contracts for Differe
71、nce to close the gap between the market and production price for clean ammonia,blending mandates,and/or clean ammonia tax credits.Should it not be possible to secure physical volumes of clean ammonia,the corridor would still be able to kick off on time by using so-called swapped volumes from book an
72、d claim systems,which are likely to be available well in advance of 2028.Under this system,ships on the corridor would use grey ammonia while claiming the benefit of clean ammonia produced elsewhere in a fuel producers portfolio.Green ammonia from the Australian Renewable Energy Hub project in the P
73、ilbara,which could be online between 2028-30 Clean ammonia from additional projects that could bedeveloped in the Pilbara in this timeframe Clean ammonia from elsewhere in Australia,which could reach 3 million tonnes in 2028 and 15 million tonnes by 2030Clean ammonia imports from projects elsewhere
74、in the world,including the US,Chileand countries in the Middle East,enabled by the low cost of shipping ammoniaUse of swapped volumes in a book and claim system,leveraging international clean ammonia production AttractivenessExecutive summaryFuelling the decarbonisation of iron ore shipping between
75、Western Australia and East Asia with clean ammonia13Bunkering The study examines two potential locations for bunkering on the corridor-the Pilbara ports in Western Australia and Singapore which were identified as promising options in the pre-feasibility stage.While other bunkering locations for the
76、corridor are possible,given the significant early momentum around clean ammonia production in Australia and future fuel bunkering in Singapore,the decision was made to focus on these locations for the assessment.The assessment shows that there could be at least two workable options for bunkering on
77、the route.Subject to safety and regulatory developments,both sets of ports Singapore and Pilbara could introduce clean ammonia bunkering in the next 5 years,in time for the corridors kick off.While there is no bunkering in the Pilbara at present,the analysis confirms that if clean ammonia bunkering
78、were to become available it would represent a competitive option for the corridor going forwards.Not only could the fuel be relatively efficiently delivered to the port from local production sites,but,importantly,bunkering in the Pilbara would avoid the need to make costly deviations from the trade
79、route.Singapore would also be well-positioned to serve as a bunkering location for the corridor.Ongoing feasibility studies and plans for piloting and infrastructure development suggest that commercial clean ammonia bunkering could be available in the port by 2027 or potentially earlier,and it is li
80、kely that it could offer competitive and efficient bunkering alongside other advantageous services.Bunkering in SingaporeBunkering in PilbaraSupplied by BPHExecutive summaryFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia14Conclusions and n
81、ext steps These results suggest that there is a feasible pathway to implement the Western Australia-East Asia iron ore corridor using clean ammonia,with the core elements developing and deploying ammonia-powered vessels on time,access to sufficient fuel,and the availability of bunkering within reach
82、.This could include having the first clean-ammonia powered vessels on the corridor by 2028,5%uptake by 2030 and full decarbonisation by 2050.As such,the report reinforces the corridors potential to be a first mover in shippings decarbonisation and help put the sector on track to reach zero emissions
83、 by 2050,by deploying zero-emission solutions at scale starting this decade.While the opportunity to decarbonise the corridor is within reach,to seize it the following important conditions must be in place:Confidence in and acceptance of ammonia as a safe marine fuel safety is a top priority for all
84、 actors in the shipping sector.As such,the corridor will only be able to move towards implementation if a high level of confidence is established that ammonia can,indeed,be safely used as a marine fuel.Substantial work is ongoing to validate ammonias safety case,and the results will be crucial for t
85、he corridors next steps.Policy support partnership and support from the public sector will be essential to move clean ammonia-powered vessels,bunkering,and production from concept to reality.In particular,measures to close the cost gap between clean ammonia and conventional fuels will be needed to u
86、nlock investments.Grants supporting vessel and infrastructure development,production tax credits,and/or a Contracts for Difference scheme focused on the corridor,are all possible elements that should be considered by policymakers.Continued collaboration and coordinated action through the corridors v
87、alue chain the whole value chain from fuel producers and suppliers,to ports,shipowners,cargo owners,and investors has a role to play in bringing green corridors to life.There is already a high level of industry collaboration around the Western Australia-East Asia iron ore corridor,including through
88、the Getting to Zero Coalitions Australia-East Asia Iron Ore Corridor Task Force.To achieve their shared ambitions,interested actors should come together through platforms like the Task Force to tackle the barriers,reduce the risks,and drive the innovation needed to take the corridor forward.As a nex
89、t step in this direction,a forthcoming analysis from the Task Force will seek to identify the commercial frameworks and policies that can deliver the corridor,as a complement to this study.Supplied by Oldendorff15Fuelling the decarbonisation of iron ore shipping between Western Australia and East As
90、ia with clean ammoniaBackground and introduction1Background and introductionFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia161.1 Green shipping corridors and why they matter The creation of green corridors defined as specific trade routes
91、where the feasibility of zero-emission shipping is catalysed by public and private action offers the opportunity to accelerate shippings transition to zero emissions.Shipping is a hard-to-abate sector,but some trade routes offer relative advantages,either because they are near potentially attractive
92、 fuel supply hubs,have comparatively simple operational profiles,or are likely to have advantageous economics.The idea behind establishing green corridors is to identify and leverage these advantageous routes for accelerated action.As they may with special economic zones,policymakers can target thes
93、e routes to create an enabling ecosystem of fit-for-purpose regulatory measures,financial incentives,and safety regulations.At the same time,industry may develop corridor-specific arrangements,such as joint ventures,demand-pooling initiatives,or transparent and standardised emissions reduction credi
94、ting and tracking,that lower the threshold for action throughout the value chain.While corridors are focused enough to make decarbonisation manageable,they are also large enough to be impactful:They offer scope for participation from all value chain actors needed to scale low or zero-emission shippi
95、ng,including fuel producers,shipowners and operators,cargo owners,and regulatory authorities They could provide offtake certainty to fuel providers,supporting investments in zero-emission fuel plants and essential bunkering infrastructure They could generate strong demand signals to shipowners and o
96、perators,shipyards,and engine manufacturers to catalyze and scale investments in zero-emission shipping technologiesCreating green corridors could lower the threshold for action by industry and policymakers,but they will not emerge by themselves;key stakeholders need to commit to action and contribu
97、te to the analysis,evaluation,and planning that could underpin their development.Background and introductionFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia171.2 The Western Australia-East Asia iron ore green corridor opportunityThe iron or
98、e shipping routes between Western Australia and East Asia have been identified as a major opportunity for establishing first-mover green shipping corridors.The Getting to Zero Coalitions The Next Wave(2021)report demonstrated how green corridors can be conceived,prioritised,and designed.The report i
99、dentified ten routes as strong candidates for establishing green corridors worldwide.MetricAus-China iron oreLarge volumes,fewer policy enablersBrazil-China iron oreHigh volume,with higher shipping costsAus-Japan iron oreLower volumes with committed stakeholdersTranspacific containersMajo
100、r mainline routeAus-Europe containersLong,high-emission mainline routeTransatlantic containersSmall volumes,more policy enablersNorth-South containersLow volumes,limited ability to pass on costsSaudi-India ammoniaPotential future fuel,small traded volumesAsia-US automotiveLow volume,high value,and c
101、arbon intensiveSaudi-China methanol Potential future fuel,small traded volumesA.Trade and logisticsExpected future growth,CAGR 2021-2025Share of global trade volumeBasis pointskgCO2e/tonne cargo1=low,5=high1=low,5=high1=low,5=high$/GJtonne CO2e%B.EmissionsCurrent carbon emissions on corridorCarbon i
102、ntensity on routeC.Value and cost pass-throughScope 3 importance for traded good sectorRelative price increase of traded goodD.Zero-emission fuel supplyDelivered cost of zero-emission fuel in 2025E.Stakeholder readinessEase of stakeholder environmentNational policies/regulations(net zero,green H2)20
103、,200,00028311%222544514328%311%23%22%42%212%14%31%40353038304%10,500,000481,900,0002912,300,0006121,700,000933,200,000561,500,00099300,000104900,000197160,0001374%6503%1953%602%1813%2103%528%145%22%46%1IMPACTFEASIBILITYHigh volume routesRapid decarbonization routesFigure 1:Mult
104、i-criteria assessment of shortlisted corridors from the The Next Wave report,including Australia-China and Australia-Japan iron ore(red)Among those shortlisted,the iron ore shipping routes from Western Australia to China and Japan were identified as especially promising,game changing opportunities,b
105、ased on their high potential impact in decarbonising the sector and favourable conditions for early action.Background and introductionFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia18An accompanying pre-feasibility assessment on the Wester
106、n Australia-Japan route found that clean ammonia would be the likely fuel choice for this corridor,for three main reasons:Significant planned capacity:Given Australias location and rich renewable resources,it would be well-placed to produce hydrogen-based fuels for a green shipping corridor.Green hy
107、drogen production capacity in Australia was,at the time,already projected to reach 29 GW by 2030,of which a significant proportion was expected to be converted to ammonia,responding to growing demand from export and industrial uses.This contrasted with the limited pipeline of clean methanol producti
108、on announced in the country.Existence of willing stakeholders:Regional consortiums were already exploring the potential for ammonia-powered shipping(e.g.ITOCHU MoU,Singapore bunkering studies),signalling broader support and momentum for the fuel in the region.Potential for an enabling environment:Th
109、e Australian Government published a National Hydrogen Strategy in 2019,flagging regulatory support for clean hydrogen production,with specific mention and focus dedicated to ammonia.Building on these findings,in April 2022 a consortium,led by the Global Maritime Forum and consisting of BHP,Rio Tinto
110、,Oldendorff Carriers and Star Bulk,signed an LOI to further assess the clean ammonia supply,bunkering,and support mechanisms required for a viable Western Australia to East Asia iron ore green corridor.This report is an output of that collaboration and is intended as a contribution by the members of
111、 the Consortium to deeper exploration of the corridor.While acknowledging that The Next Wave report spotlighted the routes to China and Japan,this report expands the focus to all four key East Asian regions for the import of iron ore from Western Australia,as defined in the Glossary.Expanding the fo
112、cus in this way enables exploration of wider possibilities for action,provides a full perspective on the potential impact of the corridor,as well as reflecting the interconnections between the routes,with accelerated decarbonisation on one route likely to reduce emissions on the other routes.1.3 Rep
113、ort objectives and approach The objective of this report is to assess the feasibility of a clean ammonia pathway for decarbonising the wider Western Australia-East Asia iron ore corridor including how much clean ammonia can contribute to the greening of the route,what this pathway could look like,an
114、d what would be required to realise it.The core emphasis is on the supply and demand of clean ammonia.As such,commercial or detailed safety requirements,which are being advanced in other fora,are not assessed in detail.In this way,the report aims to refine,update,and extend the pre-feasibility asses
115、sment carried out for the Western Australia-Japan iron ore corridor as part of The Next Wave report.While members of the Consortium represent key actors in the value chain for this trade,a broad range of stakeholders operate on the route;as such,the analysis covers the full fleet on the corridor,inc
116、luding but not limited to the vessels owned/operated by the Consortium members.A three-step approach is used to perform the assessment:1.Generating a potential scenario for decarbonisation of the corridor;2.Defining a set of requirements across vessels,fuel,and bunkering to meet the scenario;3.Asses
117、sing clean ammonias ability to meet these requirements,and what this might look like over the short,medium,and long-term.Background and introductionFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia19Generatescenario fordecarbonisationof corr
118、idorDef inerequirementsassociatedwith scenario Assesspotential of cleanammonia to meetscenario 123S-curveNumber of vessels and zero-emission fuel volumesCore elementsVesselsFuelBunkering Initial deployment timeline Fleet renewal Clean ammonia availability Enabling mechanisms Singapore and Pilbara po
119、rt readiness Singapore and Pilbara tradeoffs and benefits as bunkering location for the route Estimate number of zero-emission bulk carriers needed to meet scenario Derived clean ammonia volumes needed to power the zero-emission fleet Adopt S-curve scenario where clean ammonia-powered ships are firs
120、t deployed in 2028 and then ramped up following an S-shaped curve to full decarbonisation in 2050Methodology:Three-step approach The report comprises two main sections after this introduction.Section 2 establishes and describes the decarbonisation scenario that serves as a foundation for the analysi
121、s.Section 3 assesses whether a clean ammonia pathway could meet its requirements and what this might look like.20Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaDefining and exploring a decarbonisationscenario for the corridor2Defining and
122、exploring a decarbonisation scenario for the corridorFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia21To assess clean ammonias potential to contribute to the development of the corridor,a plausible scenario for decarbonisation of the route
123、 has been defined.In a 2021 article,the Getting to Zero Coalition,UMAS,and COP26 Climate Champions illustrated how the adoption of zero-emission fuels in the shipping sector would most likely follow an S-curve starting with a slow emergence period,followed by a rapid growth phase,before eventually f
124、lattening out,as the new fuels are established and become the“new normal”.The decarbonisation of the Western Australia-East Asia iron ore green corridor could be aligned with the articles illustrative uptake of zero-emission fuels of 5%by 2030,25%by themid-2030s,and 90%by the mid-2040s(Figure 2).Thi
125、s is viewed as a fit-for-purpose scenario for this analysis for two reasons.First,it is ambitious but credible,landing at zero-emissions by 2050 with a pathway based on insights from past industrial transformations.Second,because it,therefore,offers a robust baseline for testing the feasibility of a
126、 clean ammonia pathway for implementation of the corridor.The version of the curve adopted for the analysis follows the same milestones as the sector-wide S-curve,with one difference.Since ammonia is still in development as a zero-emission solution for shipping,the starting point for the curve has b
127、een set to reflect a reasonable potential start date for commercial operation of ammonia-powered bulk carriers on the corridor.Based on a high-level assessment of technology,regulatory,and commercial development timelines as well as expectations and forecasts from other stakeholders relevant to the
128、corridor1,this potentialkick-off is set in 2028.The feasibility of kicking the corridor off by this starting point is explored further in Section 3.Figure 2:SZEF adoption curve from UMAS/GMF(2021)with an adapted kick-off year of 2028 for the Australia-East Asia iron ore green corridor.1.Cf.Yara Clea
129、n Ammonias most recent expectations around commercial deployment of ammonia-powered vessels in 2028-2029.Source:Yara Clean Ammonia Capital Markets Day(June,2022).Scalable zero-emission fuel(SZEF)adoption rate504030201002022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048
130、20502%5%27%93%2028kick-0ffDefining and exploring a decarbonisation scenario for the corridorFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia222.1 Applying the scenario to the Western Australia-East Asia iron ore corridor2.1.1 Demand for zer
131、o-emission cargo transportDisclaimerFor the purposes of this segment of the report,the Consortium relied on independent third-party data from the Steel Sector Transition Strategy published by the Mission Possible Partnership(MPP).While the Consortium is of the view that the forecasts on cargo volume
132、s transiting through the Western Australia to East Asia green corridor mentioned in the MPP Steel Sector Transition Strategy appear to be reasonable,the Consortium is unable to independently validate the findings from the MPP.The first step in exploring what such a decarbonisation pathway for the co
133、rridor would look like is determining“S-curve aligned”demand for iron ore transport on the corridor between now and 2050.Independent analysis undertaken for the MPP Steel Sector Transition Strategy report,which models global trends in the decarbonisation of primary ore-based steel making and the tra
134、nsition to scrap-based steel production technologies,is used for this purpose.Insights for this study focus on the trajectory in the Transition Strategys Baseline Scenario to 2050 in East Asian markets2.As of today,China is the largest importer of iron ore from Australia,accounting for approximately
135、 85%of total Australian exports to the region.The remaining 15%of imports are currently split across the remaining East Asian markets.In the Sector Transition Strategy scenario by 2050 total combined demand for iron ore across the four countries is expected to reach approximately 900 to 1000 million
136、 tonnes per year.By overlaying the decarbonisation curve on the Sector Transition Strategy projections,an outlook is generated for zero-emission iron ore transport on the route.Assuming imports from Australia to the four markets maintain their 7-year historical average,this arrives at approximately
137、36 million tonnes of zero-emission iron ore transport on the corridor in 2030,rising to nearly 600 million tonnes by 2050,as shown in the Figure 3.2.To note:This analysis does not cover exports to Southeast Asian markets,which have the potential to become a significant demand hub for iron ore out of
138、 Australia.Defining and exploring a decarbonisation scenario for the corridorFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia23Figure 3:Scenario decarbonisation rate applied to cargo volumes on the Western Australia-East Asia iron ore green
139、 corridor.ETC analysis(2023)based on the Mission Possible Partnerships Steel Sector Transition Strategy Baseline Scenario(2022).2.1.2 Required number of zero-emission vessels and clean fuel volumesAs a second step,the zero-emission transport demand is translated into required numbers of zero-emissio
140、n vessels and quantities of clean ammonia.A model with vessel and voyage parameters representative of the fleet on the corridor is used for the analysis,for which a full list of assumptions can be found in Appendix 4.1.As shown in the top of Figure 4,a total of 8 zero-emission vessels would need to
141、be operational on the corridor in 2028,increasing to 23 zero-emission vessels by 2030,and topping out at approximately 360 by 2050.The annual deployment rate is shown in the bottom of the Figure,highlighting the number of additional vessels that would need to be deployed yearly to 2050 to provide ze
142、ro-emission transport of the calculated cargo volumes.Overall,the greatest growth in zero-emission vessels would be in the 5-year period between 2035-2040,with approximately 135 zero-emission vessels being deployed.202220252028 203020352040204520500500350400450500550600300Zero-emission tr
143、ansport of iron ore in scenarioMillion tonnes of iron ore0052028 20302035204020452050#of vesselsCumulative zero-emission vessels in scenarioAnnual zero-emission vessel deployment231218312364Defining and exploring a decarbonisation scenario for the corridorFuelling th
144、e decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia24Figure 4:Cumulative(top)and annual(bottom)deployment of zero emissions vessels on the Western Australia-East Asia iron ore green corridor.ETC analysis(2023).This generates an“upper envelope”of approxim
145、ately 1.2 million tonnes of clean ammonia demand by 2035,or the amount of clean ammonia needed to power the full zero-emission fleet.While,in practice,the level of demand could be lower than this“envelope”,due to other low and zero-emission fuels featuring in the fuel mix,using the“envelope”provides
146、 a robust stress test of clean ammonias potential to contribute to the greening of the route.See Section 3.2 for this assessment.As seen in Figure 4,after accounting for efficiency improvements over time,the scenario would have an“envelope”of 0.1 million tonnes of clean ammonia in 2028,0.3 million t
147、onnes in 2030,and up to 4.9 million tonnes by 2050.Figure 5:“Upper envelope”of clean ammonia demand on the Western Australia-East Asia iron ore green corridor with and without energy efficiency improvements.ETC analysis(2023).4030202028 20302035204020452050#of vesselsAnnual zero-emission
148、vessel deployment23.00.51.01.52.02.53.03.54.04.55.05.56.007080900252028 20302035204020452050Mt of NH3(right-hand axis:Petajoules of energy)No efficiency improvement(additional)With efficiency improvementUpper envelope of clean ammonia demand in scenario0.10.31.20.40.
149、71.03.14.34.90.1Defining and exploring a decarbonisation scenario for the corridorFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia25It is important to note that the corridors fuel requirements will be affected by increasing adoption of ener
150、gy efficiency measures.Tightening environmental regulations,and the urgency to decarbonise,are spurring a move towards increased energy efficiency in the sector.Key existing examples of regulations targeting energy efficiency improvements include:IMOs Carbon Intensity Indicator(CII)rating,which is t
151、argeting a 40%reduction in carbon intensity in the maritime sector by 2030 relative to 200 IMOs Energy Efficiency Design Index(EEDI)Phase 3,stipulating a 10%lower fuel consumption compared to Phase 2 EEDI requirements Before factoring in measures to mitigate the increased cost of zero-emission fuel,
152、efficiency improvements are conservatively expected to result in around a 17%reduction in fuel consumption on the corridor by 2050.As such,an approximate annual 0.6%reduction in fuel consumption,taken from IRENAs 1.5-degree scenario3 for decarbonisation of the sector,is incorporated into the clean a
153、mmonia demand calculations.Examples of measures that could contribute to increased energy efficiency include,but are not limited to:Optimisation of voyage parameters,i.e.route and speed Use of energy management systems Ensuring proper vessel maintenance and optimal operation of the propulsion system
154、 Installation of energy saving devices,such as wind-assisted propulsion technology Use of low friction paints with antifouling protectionKey takeaways:Corridor decarbonisation scenarioA scenario where clean ammonia-powered vessels are first deployed in 2028 and then ramped up following an S-shaped c
155、urve to full decarbonisation in 2050 is adopted for this study.This trajectory would require the following number of zero-emission vessels to be deployed and volumes of clean ammonia:YearRequired zero-emission vessels operating“Upper envelope”of clean ammonia demand202880.1 Mt NH32030230.3 Mt NH3 20
156、35811.3 Mt NH320503644.9 Mt NH33.IRENAs 1.5C scenario assumes a 20%decrease in emissions by 2050(relative to 2018)via energy efficiency improvements,translated here to an average annual decrease in fuel consumption required per roundtrip.These measures are assumed to apply equally across all vessel
157、types(conventional,ammonia,etc.).Source:A pathway to decarbonise the shipping sector by 2050(IRENA,2021).Supplied by Pilbara Ports Authority26Fuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammoniaFeasibility evaluation3Feasibility evaluationFuell
158、ing the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia27This section looks at the feasibility of clean ammonia delivering the decarbonisation scenario described in section 2.The evaluation is done in three parts covering vessels,fuel,and bunkering,str
159、uctured around the questions in Table 1 below:Table 1:Key questions used to address feasibility of the Western Australia-East Asia iron ore green corridor.Report SectionKey questions3.1 Vessels Could clean ammonia-powered bulk carriers feasibly be put on the water by the scenario kick-off in 2028?Wh
160、at would this require?Could clean ammonia-powered bulk carriers be deployed at a rate consistent with the scenario after this point?How many could be newbuilds?3.2 Fuel Could enough clean ammonia feasibly be available in the Pilbara and/or the rest of Australia to hit the“upper envelope”of demand im
161、plied by the scenario?Could imports serve to fill any gaps?What challenges are buyers and suppliers expected to face in contracting for clean ammonia,as a new fuel?How can these challenges be solved?3.3 Bunkering Could bunkering feasibly be available for the first wave of clean ammonia-powered vesse
162、ls?What are the tradeoffs between bunkering the corridor in Western Australia versus Singapore?3.1 VesselsIn this section the feasibility of deploying ammonia-powered bulk carriers on the corridor is explored from two perspectives:Initial deployment:Ammonia is still in development as a zero-emission
163、 solution for shipping,as such the feasibility of having clean ammonia-powered vessels on the water by 2028 is dependent on a number of technological,regulatory,commercial,safety and crew-related advances.Vessel availability:Over the medium to long-term,as the corridor transitions the existing fleet
164、 to new clean ammonia-powered vessels,the ability to introduce vessels at a rate consistent with the deployment curve will be a key success factor.3.1.1 Initial deploymentTo assess the feasibility of deploying ammonia-powered vessels by 2028,this sub-section focuses on whether required safety regula
165、tions,technological developments,training procedures,and economic incentives could be in place by that date.Across these 4 areas,7 vessel-related prerequisites are identified and assessed:A.IMO interim guidelines for ammonia-powered vessels in placeB.IMO updates to IGF Code to include ammonia in pla
166、ceC.Ammonia engines for bulk carriers commercially availableD.Design for ammonia-powered bulk carrier suited to this corridor availableE.Shipyard berths securedF.Crews upskilled to safely handle ammoniaG.Investment case in placeFeasibility evaluationFuelling the decarbonisation of iron ore shipping
167、between Western Australia and East Asia with clean ammonia28Required roadmapFigure 6 plots the deadlines by which the 7 prerequisites would need to be in place,highlighting the need for critical elements to be in position by 2025 and 2028 to enable vessels orders and operation respectively.To undert
168、ake the assessment,each of the prerequisites are assigned a“required by”deadline,estimating the latest possible point by which they would need to come into place to enable a kick-off in 2028,in view of relevant lead-in times,interdependencies between the prerequisites,and the decision-making process
169、 associated with ordering a vessel.Rather than referring to the expected point by which they will be in place,the deadlines should be understood as responses to the question“working backwards from 2028,when would the different prerequisites need to be in place to have an ammonia-powered vessel on th
170、e water?”Figure 6:Roadmap showing deadlines by which prerequisites would need to be in place in order to get ammonia-powered vessels on the corridor by 2028.ETC analysis(2023).Key for timeline symbols Prerequisite required timing to be completed Building blockVesselRegulation/SafetyTechnologyTrainin
171、gIMO interim guidelines for ammonia-fuelled vessels in placeVessel design for bulk carrier suitable to this corridor availableAmmonia engines for bulk carriercommercially availableIMO updates to IGF code to include ammonia in placeShipyard berths securedCrew upskilledSufficient clean NH3 availableCl
172、ean NH3 certification mechanism in placeFirst vessels on waterClean ammonia refueling availableNH3 bunkering available in Pilbara or SingaporeTodayFirst vesselsorderedFirst vesselsconstructionstartConfirm demand to fuel supplyand bunkering providersInvestment case in placeEconomicsFuel supplyEnabler
173、sFuelBunkering2029202820272026202520242023Lead-timeorder to constructionstartLead time to establish physical supply chain(e.g.,ammonia bunkering vessel)Constructionstart to deliveryFeasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with cl
174、ean ammonia29The timeline is centred around three main milestones,represented by the blue and red vertical lines:1.To secure the shipyard berth(s)for construction,it is expected that a vessel order would need to be made by 2025 at the latest.3 prerequisites are needed to trigger the order the availa
175、bility of a design for an ammonia-powered bulk carrier suitable to the corridor,IMO interim guidelines for ammonia-powered vessels being in place,and a clear investment case being in place for ordering ammonia-powered vessels.2.The next milestone is the start of vessel construction.Based on construc
176、tion times for conventional bulk carriers plus a“buffer”to account for the novelty and added complexity of an ammonia-powered design,construction is expected to take between 1 and 1.5 years,and so required to commence by no later than 2027.For this to happen,ammonia engines with suitable specificati
177、ons for large bulk carriers would need to be commercially available.3.Lastly,the delivery of the first ammonia-powered bulk carriers is set in 2028,in line with the scenario kick-off.Two prerequisites would need to be in place before this point IMO updates to the International Code of Safety for Shi
178、ps Using Gases or Other Low-flashpoint Fuels(IGF Code)as well as crews being upskilled to operate the new vessel(s).Three non-vessel related prerequisites are also included in the timeline,all before the 2028 red line:sufficient clean ammonia being available for the corridor,certification being in p
179、lace to enable tracking and verification of clean ammonia greenhouse gas intensity,and bunkering of clean ammonia being available in the Pilbara and/or Singapore.While these prerequisites refer to developments elsewhere in the value chain,they are included in the roadmap to stress the interconnected
180、 relationship between vessel and fuel infrastructure deployment.They are examined in further detail in Sections 3.2 and 3.3 on fuel and bunkering.The roadmap should not be seen as fully exhaustive.In particular,it is worth highlighting that,in addition to the IMO,other standards-setting bodies inclu
181、ding flag states,municipalities,and port authorities will play a role in establishing the regulatory framework for safe operation of ammonia-powered vessels.On top of regulations,a high level of confidence and acceptance will need to be reached among stakeholders that ammonia can,indeed,be safely us
182、ed as a marine fuel.In both cases,ammonia-powered vessel pilots,risk assessments,and safety studies will need to be progressed over the coming years.For simplicitys sake,it is assumed that these elements are successfully pursued and in place;this is not to minimise the importance of real-world actio
183、n in this area.Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia30On track to meetLow risk identifiedMedium risk identifiedHigh risk identifiedKey for ratingBuilding blockPrerequisiteRequired timingExpected timingRating
184、VesselRegulation/SafetyIMO interim guidelines for ammonia-fuelled vessels in place By 2025Q4 20-20-20-2025By 2028By 2027By 2025By 2025By 2028By 2025IMO updates to IGF code to include ammonia Ammonia engines for bulk carrier commercially availableVessel de
185、sign for bulk carrier suitable to this corridor availableShipyard berths securedCrew upskilledInvestment case in placeTechnologyTrainingEconomicsAssessing progress on the vessel prerequisitesEvidence suggests that to meet a 2028 start date,some low,medium and high level risks would need to be mitiga
186、ted.Based on desk research and expert discussions,developments towards meeting the deadlines are assigned a risk rating,highlighting where additional effort is required to achieve a 2028 kick-off.The ratings are shown in Figure 7:Figure 7:Rating of vessel-related prerequisites on regulation/safety,t
187、echnology,training,and economics.The following subsections highlight the rationale behind and supporting evidence for each rating.In those cases where risks are identified,actions that could be taken to mitigate the risks are suggested.On trackPrerequisite A IMO interim guidelines for ammonia-powere
188、d vessels in placeIMO interim guidelines for ammonia-powered vessels are expected to be finalised in 2024,on time for vessel orders by 2025.The development of interim guidelines for ammonia as a fuel was initiated at the IMOs Sub-Committee on Carriage of Cargoes and Containers 8th session in Q3 2022
189、.The workplan,agreed by the Sub-Committee,envisages finalisation of the guidelines in 2024 at the latest.Formal adoption is likely to follow in 2025.The design of an ammonia-powered vessel intended for delivery in 2028 would be developed and approved under the alternative design approach,where a des
190、ign is approved by a Flag state and Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia31class based on risk assessments.While not strictly required for the deployment of the vessels,it would,however,be beneficial to fact
191、or the interim guidelines into the design process,to ensure the design is in line with emerging IMO requirements.Prerequisite C:Ammonia engines for bulk carrier commercially availableSuitable ammonia engines are expected to be available between 2025-2026 based on engine manufacturers most recent ann
192、ouncements and work programmes.The development of ammonia engines is being driven by three of the sectors main manufacturers-MAN ES,WinGD,and Wrtsil.All three manufacturers are moving forward with engine concepts4:MAN ES is planning to perform full-scale engine tests in 2023,with first delivery to a
193、 shipyard expected before the end of 2024.Stakeholder engagement conducted for this study suggests that the first models will be ammonia versions of MANs S60 and G60 engines,with further engine types to be developed after this point.WinGD envisions its ammonia engine technology to be available in 20
194、25.This includes an agreement with CMB.TECH to construct 10 bulk carriers with WinGD 2-stroke ammonia engines in 2025/26.Wrtsil is coordinating a consortium of shipping stakeholders with the aim of having an ammonia engine concept running on 100%ammonia in 2023.The project aims to present a lab-base
195、d demonstrator of a 4-stroke ammonia engine,and lab-based test engine plus retrofit of a 2-stroke engine by 2025.Based on these developments,it is expected that a suitable ammonia engine for the bulk carriers on the corridor will be commercially available between 2025-26.Nonetheless,to ensure the en
196、gines are compatible,shipowners and cargo owners on the corridor should clearly signal their demand for ammonia engine sizes and specifications relevant to the bulk carriers that operate on the route.Low risk identifiedPrerequisite B IMO updates to IGF Code to include ammoniaA low risk has been iden
197、tified for IMO making updates to the IGF Code to include ammonia by 2028.After the adoption of the interim safety standards for ammonia-powered vessels,necessary amendments to the International Convention for the Safety of Life at Sea(SOLAS)will be made.This will include further specification of amm
198、onia-powered vessel safety,design and operational requirements as part of the International Code of Safety for Ships using Gases or Other Low-flashpoint Fuels(IGF Code).While no official timeline has been set,according to expert engagement,this process is likely to take 2-3 years after the adoption
199、of interim guidelines.4.Company report by MAN ES(2022).Press-release by WinDG(2021).Press-release by Wrtsil(2022).Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia32Prerequisite D-Design for bulk carrier suitable to thi
200、s corridor availableA low risk has been identified for a suitable ammonia-powered bulk carrier design being available,with a number of designs having already been granted Approval in Principle(AiP).The“required by”timing for this prerequisite implies obtaining an AiP for an ammonia-powered Capesize
201、or Newcastlemax bulk carrier5 suited to the operational requirements of the corridor.This would need to be available by no later than 2025 to enable the finalisation of construction contracts.Expert discussions conducted with classification societies,cargo owners and shipowners suggest that a vessel
202、 design can be developed in as little as 6-9 months and receive AiP in 1-1.5 years total.There are already several design projects for ammonia-powered Capesize and Newcastlemax vessels underway,with AiPs being granted to Anglo-Eastern,K-Line,DSIC,and MOL&Mitsui6 between 2022-Q1 2023.These concepts c
203、an provide a starting point for the development of a relevant design.Hence,it is expected that an AiP for an ammonia-powered vessel design for this corridor could be reached in 2024.In terms of guidelines,as previously noted,the design would need to be developed and approved under the alternative de
204、sign process.Major classification societies have already issued safety guidelines for ammonia-powered vessels,which can be used to support this process and provide assurance that the design meets current levels of safety performance.While this prerequisite has a low risk rating,to mitigate against d
205、elays,shipowners,cargo owners and original equipment manufacturers on the corridor should either provide firm and detailed requests for a design in the near future or consider starting a joint industry project to spearhead the development of a design.Medium risk identifiedPrerequisite E Shipyard ber
206、ths securedA medium risk has been identified for securing shipyards berths on time,in light of the busy orderbooks of relevant Asian shipyards.Given typical lead times from ordering a vessel to the start of construction and delivery,a slot at a relevant shipyard would need to be secured by no later
207、than 2025.However,expert engagement indicates that most major shipyards in East Asia already have limited capacity in 2024-2025,due to large numbers of container ship and LNG carrier orders.To ensure a berth at a suitable shipyard is secured on time,shipowners on the corridor should signal their int
208、ent to have ammonia-powered bulk carriers built to the yards soon.This should be followed by concrete orders as soon as possible once an ammonia-powered vessel design is available,i.e.in 2024.5.Bulk carriers of the Capesize and Newcastlemax sizes are currently widely used on the Australia-East Asia
209、iron ore corridor.At the same time,it should be noted that as shipowners look to add more modern and efficient tonnage to their fleets in the future,the proportion of Newcastlemax vessels,designed to carry greater volumes of cargo,can be expected to gradually increase.6.In Q4 2021 Anglo-Eastern Tech
210、nical Services(AETS)has been granted an AiP by ABS for an ammonia-fuelled Newcastlemax bulker design,final delivery timeline yet to be determined;Japanese K-Line plans to deliver its ammonia-powered bulk carrier,the design of which has been recently granted an AiP by ClassNK,in 2026;Chinese DSIC has
211、 been granted an AiP from Lloyds Register in Q2 2022 for the construction of an ammonia-powered Newcastlemax,final delivery date yet to be determined;in Q1 2023 MOL&Mitsui acquired an AiP from ClassNK for Capesize bulker,delivery timelines yet to be determined.Feasibility evaluationFuelling the deca
212、rbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia33Prerequisite F Crew upskilled A medium risk has been identified around crew upskilling,with further research and action needed in this space.Shipowners would need to ensure that crews are upskilled and certi
213、fied to safely operate ammonia-powered vessels by the time of their delivery.The key piece of IMO regulation relating to seafarer training,The International Convention on Standards of Training,Certification and Watchkeeping for Seafarers(STCW),is to undergo a revision starting in 2023,providing an o
214、pportunity to integrate zero-emissions fuels,including clean ammonia7.The last two revisions to the STCW took 3-4 years,followed by an 18-month grace period before coming into force.This suggests that by 2028 the STCW could be updated to include seafarer training and certification for ammonia-powere
215、d vessels.However,with no real-world experience to draw on at this stage,there remain significant knowledge gaps around best practices for operating ammonia-powered vessels.These gaps must be bridged through further research and action.A series of projects,including under the Zero-Emission Shipping
216、Mission,the ICS and UN Global Compacts Just Transition Taskforce,as well as from Lloyds Register Maritime Decarbonisation Hub and the Maersk Mc-Kinney Moller Center for Zero-Carbon Shipping,are studying the issue and preparing recommendations,which are expected to support progress in this area.Findi
217、ngs from such efforts,and the first ammonia-powered vessel pilots,should be fed into the ongoing STCW revision process to ensure timely progress is made.Stakeholders interested in the development of the green corridor can play a role in mitigating the risk associated with delays in crew upskilling b
218、y taking concrete actions:In the immediate term,fuel providers can engage with maritime academies to share best practices on ammonia handling from existing industries,such as fertiliser production.Looking ahead,governments can fund training centres that offer specialised courses for seafarers on han
219、dling ammonia while,Ship managers can explore ammonia training courses and recruit ammonia specialists to prepare their crews for fuel.High risk identifiedPrerequisite G Investment case in place A high risk has been identified for the economic prerequisites for making clean ammonia-powered vessel or
220、ders being in place by 2025.Analysis in The Next Wave suggested that,without action,there will be a roughly 65%gap between the total cost of ownership of a clean ammonia-powered vessel and HFO vessel in 20308.This gap is largely a result of the increased cost of clean ammonia relative to HFO.In this
221、 context,the introduction of incentives and regulations to promote the use of clean ammonia is essential for the corridor.However,progress in implementing such measures remains uncertain,with the timing and nature of potential“medium-term measures”at the IMO still unclear,and policy frameworks at th
222、e national level also yet to fully crystallise.For this reason,and given the need for clarity in the next 7.Source:BIMCO(2022).8.Source:The Next Wave(GMF,2021).Exhibit 7:Total cost of ownership of pathways for iron ore bulk carriers.Feasibility evaluationFuelling the decarbonisation of iron ore ship
223、ping between Western Australia and East Asia with clean ammonia342 years,this prerequisite is given a high risk.It should be noted that this applies as much to first mover action in the sector generally as this corridor specifically.Further action will be needed to support a viable investment case,w
224、hich could include:National and international policy measures focused on closing the fuel cost gap,such as clean ammonia tax credits,Contracts for Difference,and/or greenhouse gas pricing.Public investment through credit guarantees,anchored blended finance and grant finance to lower cost of capital
225、as well as.Green premiums on iron ore shipped using zero-emission vessels and,Reduced port fees for zero-emission vessels.Key takeaways:Vessel prerequisites It would be feasible to have clean ammonia-powered bulk carriers on the water by 2028,if action is taken to mitigate several risks.Key technolo
226、gies,including suitable engines,and regulations,including IMO safety guidelines,covering ammonia-powered vessels should be in place when needed.There is a low risk around a suitable design for an ammonia-powered bulker carrier being available and updates to the IMOs IGF Code to include ammonia-power
227、ed vessels being made on time.A medium risk is associated with the following elements:Securing a slot for the construction of ammonia-powered vessels,which may be challenging due to a lack of shipyard berths.Shipowners should consider ordering as soon as feasible.Crew upskilling,with the STCW Conven
228、tion needing to be updated to include ammonia when it is reviewed starting this year.Finally,there is likely to be a significant cost premium between clean ammonia-powered and conventionally-fuelled vessels for the foreseeable future,posing a high risk to hitting a 2028 kick-off for the corridor.Pol
229、icymakers actions over the coming few years will be essential to create a viable investment case for ordering ammonia-powered vessels.Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia353.1.2 Vessel availabilityThe previ
230、ous section highlighted that progress on technology,safety/regulation,training,and economics could allow ammonia-powered bulk carriers to be delivered in line with a 2028 starting date.The next question is:could they be deployed at the pace needed?In general terms,there would be 3 ways to get new am
231、monia-powered vessels on the water:1.Newbuild ammonia-powered vessels could replace conventionally-powered vessels on the route when they would naturally be replaced2.Conventionally-powered vessels on the route could be retired early to enable accelerated deployment of newbuild ammonia-powered vesse
232、ls3.Conventionally-powered vessels could be retrofitted with ammonia technologiesAll else being equal,newbuilds replacing conventionally-fuelled vessels at their natural age of retirement is expected to be both the least disruptive and least cost option.By analysing the age distribution of the iron
233、ore carriers regularly operating on the route and overlaying the required number of zero-emission vessel deployments generated in Section 2 of this report,it is possible to assess how many vessel deployments on the corridor could be met in this way.To note,the economics of deploying the new vessels
234、and expected shipyard capacity are not included in the assessment,which would also impact on the eventual feasibility.Figure 8:Fleet turnover curves to new zero emissions vessels.ETC analysis(2023).See Appendix 4.4 for further details on the fleet turnover age assumption.202220252028 203020352040204
235、52050Cumulative number of new zero-emission vessels#of new fossilvessels addedper yearReplaces existing fossil-fueled vessel in fleet(total:63)Replaces future fossil-fueled vessel in fleet(total:180)Replaces future fossil-fueled vessel in fleet(total:180)Shortage-other lever required(total:180)New z
236、ero-emission vessels deployed per year40030020052028 2030203520402045205040302090262423238027471 50 37 24 100921 0120Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammon
237、ia36The analysis reveals that roughly two thirds of the zero-emission vessels needed to meet the decarbonisation scenario could come from natural fleet renewal that is,shipowners replacing old conventionally-powered vessels on the route with new ammonia-powered vessels when renewing their fleets.Thi
238、s is particularly the case in the near-term.If orders were made in the coming years,almost all of the 81 clean ammonia-powered vessels on the corridor up to 2035 could be deployed this way.On the other hand,either retrofits or early retirements would be required during the steepest part of the S-cur
239、ve in the mid-2030s,and particularly in the 2040s,to complete the corridors transition.Modelling undertaken for the Getting to Zero Coalition Strategy for the Transition to Zero-Emission Shipping report suggests that,in a zero emissions future for the sector,roughly half of all zero-emission vessels
240、 could be retrofits by 20509.In this context,the relatively late occurrence and small proportion of retrofits or early retirements needed on the corridor bolsters its favourability for ambitious action.At the same time,it will be important to find a solution to meet the shortage that does exist.Poli
241、cy action that provides clarity over the sectors decarbonisation trajectory and facilitates retrofits and/or early retirements would be important to enable this.Key takeaways:Vessel availability Following initial kick-off in 2028,it is estimated that a total of 23 clean ammonia-powered vessels would
242、 need to be operational on the corridor by 2030,81 by 2035,and approximately 360 by 2050 to meet the decarbonisation scenario.Enough vessels will be retired to enable the introduction of most of the clean-ammonia vessels required.If orders were placed over the coming years,almost all clean ammonia-p
243、owered vessels on the corridor up to 2035 could be deployed in this way.After this point,some retrofits and/or early retirements would be required,supported by regulatory clarity and policy incentives.9.A Strategy for the Transition to Zero-Emission Shipping(UMAS/GtZ,2021)-pages 9-10Feasibility eval
244、uationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia373.2 FuelThe assessment in Section 2 of the report determined that the corridor could have an“upper envelope”of 0.1 million tonnes of ammonia demand in 2028,increasing to approximately
245、4.9 million tonnes by 2050.At present,however,clean ammonia is not widely available at scale,raising the question of whether there could be enough clean ammonia available to meet the“upper envelope”of demand on the corridor.In this section,this question is assessed from two perspectives:Fuel availab
246、ility:Could enough clean ammonia feasibly be available in the Pilbara and/or the rest of Australia to hit the“upper envelope”of demand implied by the scenario?Could imports serve to fill any gaps?Enabling mechanisms:What challenges are buyers and suppliers expected to face in contracting for clean a
247、mmonia,as a new fuel?How can these challenges be solved?3.2.1 Clean ammonia fuel availabilityAnalysis suggests that clean ammonia is likely to be available in sufficient quantities to meet the corridors near-and long-term demand,even when accounting for demand from other sectors and uncertainties.Fi
248、gure 9,as previously shown in Section 2,highlights clean ammonia requirements during the kick-off phase between 2028-2030,ramp-up phase between 2030-2035,and scale-up phase between 2035-2050Figure 9:“Upper envelope”of clean ammonia demand on the Western Australia-East Asia iron ore green corridor.ET
249、C analysis(2023).The studys main takeaways regarding the availability of clean ammonia in each of these phases are summarised in Table 2.Additional evidence is provided in the sub-sections below,describing key local,regional,and global factors expected to impact fuel supply for the corridor.0.00.51.
250、01.52.02.53.03.54.04.55.020222025202820302035204020452050Mt of NH3 Kick-off PhaseRamp-up PhaseScale-up PhaseAmmonia requirement based on upper envelope S-curve adoption rate0.11.23.14.94.3Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia
251、with clean ammonia38Table 2:Takeaways for clean ammonia fuel availability on the Western Australia-East Asia iron ore green corridor10.PhaseKick-off2028-2030Ramp-up2030-2035Scale-up2035-2050Demand 0.1-0.3 MtNH3/yr64200,10,3202820300.3-1.2 MtNH3/y6203020354200,31,21.2-4.9 MtNH3/y64201,24,920352040204
252、52050SummaryLikelihood of physical clean ammonia availability between different procurement pathways,with the use of a book and claim system available as a back-up solution,if requiredHigh likelihood of clean ammonia availability from either local projects or others in the rest of AustraliaHigh like
253、lihood of clean ammonia availability in Australia as well as globallyProcurement pathways The corridors initial demand has the potential to be bundled into a first phase final investment decision(FID)for AREH or a similar project in Australia,contingent on finding larger offtakers(e.g.,export to Eas
254、t Asia).Additional clean ammonia production(e.g.,blue ammonia)is under investigation in the Pilbara and could also be developed to meet the fuel requirement for the kick-off phase of the corridor in these time frames.Globally a significant number of projects are currently seeking offtakers;given the
255、 relatively low cost to transport ammonia by ship,imports from these projects could be established to Western Australia or other potential bunkering locations for the corridor,such as Singapore or discharge ports in East Asia.In all of these cases,because production volumes for many projects are hig
256、her than kick-off demand from the corridor,there is an opportunity to engage with project developers to participate in initial project phases alongside other offtakers.Failing this,book-and-claim systems are likely to be in place by 2028,which would offer a back-up option for securing clean ammonia
257、supply for the corridor.There is a high likelihood that the corridors demand in this phase could be met by either local or other Australian projects as part of AREHs expansion phases or from the 13-52 million tonnes of clean ammonia per year of capacity that could be available in Australia as a whol
258、e in this period.The corridors long-term demand could be fully met by the AREH project(9 million tonnes of ammonia per year at full-scale);this will,again,be highly dependent on the volumes of additional offtakers secured by AREH.Global clean ammonia fuel supply in the 2030-50 period is unlikely to
259、be constrained should fuel production in Australia face deployment barriers imports or other bunkering options(e.g.,Singapore)are likely to be available.10.Book-and-claim system herein refers to the purchase of clean ammonia volumes decoupled from the physical supply of grey ammonia.The buyer(e.g.sh
260、ipowner,cargo owner)“claims”the emissions reductions of clean ammonia via a mass-balance certification mechanism scheme that provides assurance on the production of clean ammonia in a fuel suppliers wider global portfolio.Feasibility evaluationFuelling the decarbonisation of iron ore shipping betwee
261、n Western Australia and East Asia with clean ammonia39Clean ammonia availability in the PilbaraThe Pilbara region could be a global first mover in clean ammonia production,with large-scale availability this decade.As shown in Figure 10,supply of green ammonia in the Pilbara is currently contingent o
262、n the Australian Renewable Energy Hub(AREH)project 11.AREH is currently in the pre-final investment decision phase,with a planned start-up date before 2030 and capacity of up to 9 million tonnes of ammonia per year at full scale.Figure 10:Map of the Pilbara region in Western Australia showing curren
263、tly currently announced clean ammonia supply projects12.Based on typical project requirements and stakeholder engagement conducted for this study,it is likely that there will be a minimum offtake volume for the first phase of the project of roughly 1 million tonnes per year.Since the corridors initi
264、al demand is expected to be approximately 0.1 million tonnes per year in 2028,it is unlikely the corridor could provide sufficient offtake volumes for the AREH project to reach FID on its own.However,there is the potential for the initial clean ammonia volumes required to be bundled into a wider fir
265、st phase FID in 2028 with larger offtakers,such as importers in East Asia.Should the AREH project fail to reach FID and kick-off by 2028,other clean ammonia projects are under investigation in the Pilbara.This includes blue ammonia supply,which has the potential to be produced by applying CCS to exi
266、sting grey ammonia production in the Pilbara.While a large-scale blue ammonia project has yet to be announced,stakeholder engagement undertaken for this study suggests early demand signals could drive the development of blue ammonia production to meet the corridors kick-off requirements.11.AREH is a
267、 joint venture between bp(45%)InterContinental Energy(26.4%),CWP Global(17.8%)and Macquarie Capital/Green Investment Group(15.3%).12.Yuri green ammonia demonstration project is a joint venture between Engie Renewables,Yara Fertilisers and Mitsui.Further expansion phases not yet announced.Stakeholder
268、 engagement suggests it is unlikely for any possible expansion phases to be completed within the timeframes for the corridor kick-off in this study.Pilbara region of Western AustraliaPort DampierYara Pilbara Fertilisers Port HedlandPortsExisting production(grey ammonia)Green ammonia supply at full c
269、apacity Mt NH3 /year Iron ore minesAustralian Renewable Energy Hub(AREH)projectYuri Renewable EnergyH2 to NH3 project9.00.1Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia40A further alternative,deemed a back-up option
270、,would be the acquisition of swapped volumes of clean ammonia from book-and-claim systems 15(see example from Yara Clean Ammonia highlighted in section 3.2.2).In the medium-to-long term,the Pilbara region is likely to see hydrogen/ammonia demand from other sectors,which exceed the corridors demand.T
271、he largest source could be export demand,with Western Australias Hydrogen Strategy estimating exports from the Pilbara in the range of 3-10 million tonnes of hydrogen per year by 2050.While this could limit the clean hydrogen available for ammonia production.Conversely,it could enable the long-term
272、scale-up of and reductions in the cost of clean ammonia,should the projects have sufficient capacity for all end-users.Further demand may come from mining operations(0.6 million tonnes of hydrogen per year)and existing ammonia production(0.2 million tonnes of hydrogen per year)13,which,when combined
273、,would be comparable to the corridors 2050 hydrogen demand(0.9 million tonnes per year)14.These sources of hydrogen demand offer opportunities for the corridor to collaborate on joint offtakes.Aggregating demand via joint offtakes would enable production projects to achieve larger economies of scale
274、 see the case study below highlighting how clustering could lead to reduced ammonia production costs in the Pilbara.13.Demand for hydrogen from existing ammonia production and mining operations taken from Australia ETI(2022).Assumes that energy demand remains stable over time and mining diesel-based
275、 haulage is fully decarbonised by hydrogen fuel cell electric vehicles.Additional demand could come from port operations(e.g.reach trackers/terminal tractors)or harbour craft,but demand projections not found.14.Equivalent to 4.9 MtNH3.Conversion factor used:0.176 tH2/tNH3 from the IEA Hydrogen Proje
276、ct Database(2022).Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia41Case study:Potential for clustering to reduce clean ammonia costs in the PilbaraA key opportunity for reducing the final cost of clean ammonia is clus
277、tering,which can facilitate economies of scale in production and transportation infrastructure.Given the large distances between hydrogen supply and demand in the Pilbara region,this could result in meaningful cost savings for the corridor(and other offtakers involved).In the illustrative scenario s
278、hown in Figure 11,clustering could result in a potential 7-8%cost reduction for hydrogen,translating into a 5-6%cost reduction for clean ammonia.This assumes clustered clean ammonia demand in the order of 5 million tonnes in 2035,which is made up of demand from shipping(1.2 million tonnes from the c
279、orridor)and representative demand from export and/or other domestic uses(3.8 million tonnes).In the studys decarbonisation scenario,where the corridor requires a cumulative 55 million tonnes of ammonia between 2035-2050,this could unlock approximately.$1-1.5bn in total fuel cost savings.Figure 11:In
280、dicative case study on infrastructure/fuel cost reductions as a result of clustering15 Sources:ETC analysis(2023);EU Hydrogen Backbone(2022);Ammonia Sector Transition Strategy(MPP,2022).15.Includes CAPEX for new pipelines and compressors(data extrapolated for scaling,assuming new 500km pipeline)and
281、cost of green hydrogen production in 2035 of$2/kg H2.WA-East Asiacorridor demandin 2023(1.2 MtNH3)0.00.10.20.30.40.50.60.70.80.91112131415$/kgH2/1000kmApproximately$1-1.5bn in cumulative fuel costsavings for the corridor between 2035-50Leading to a 5-6%reduction inclean ammonia($/tNH3)Tra
282、nslate to a potential 7-8%reductionin final cost of hydrogen($/kgH3)Levelised unit of capex for hydrogen transport and compressionRepresentativeclustereddemand in 2035(5 MtNH3)0.500.21Demand(GW h2)-0.29$/kgH2/1000kmFeasibility evaluationFuelling the decarbonisation of iron ore shipping between Weste
283、rn Australia and East Asia with clean ammonia42Clean ammonia availability in the rest of AustraliaWith the potential for an array of projects to come online this decade,(clean ammonia is expected to be available at scale elsewhere in Australia earlier than in the Pilbara.As of today,approximately 52
284、 million tonnes worth of projects have been announced in Australia.While many projects are still under development and start-up dates uncertain,Australia could see significant clean ammonia production capacity coming online in the 2030s.Figure 12:Map of 8 largest currently announced green ammonia pr
285、ojects in Australia16(top)and near-term outlook for corridor demand versus clean ammonia supply based on current announcements of project start dates17(bottom).Figure 12 provides a map of the top 8 largest clean ammonia projects currently announced/under development in Australia,and expected capacit
286、y in the period between 2028-2030 period18.As shown,not including AREH,there could be approximately 3 million tonnes of ammonia per year of capacity online by 2028,increasing to 15 million tonnes per year by 2030 significantly more than the corridors 0.1-0.3 million tonne per year demand in this per
287、iod.The corridors initial demand,therefore has the potential to be bundled into a first phase FID for a project elsewhere in Australia.16.For projects which are classified as export-focused on HyResource(2023).17.Only includes projects for which full operational capacity is known and occurs before/i
288、n 2030.18.See Appendix 4.2 for a full list of clean ammonia projects in Australia currently under development.Largest Australian green ammonia projects at full capacityCorridor demand vs.Australian supply of clean ammonia(speculative)Final capacity-Mt NH3 /year Asian RenewableEnergy HubPilbaraMurchi
289、son HydrogenRenewable projectKalbarriGeraldton Export-Scale projectInvestment(GERI)GeraldtonPort Bonython-Hydron HubPort BonythonHunterHydron HubLiddellH2 Hub GladstoneGladstoneDesert BloomTennant CreekWestern Green Energy HubKalgoorlie-Boulderxx2028202920305103.13.115.11520Australian clean NH3 supp
290、ly projectionGreen corridor clean NH3 demandMt NH32010.21.82.02.02.31.09.0Supplied by Star BulkFeasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia43Many projects in Australia are taking an export-oriented offtake approach
291、,which may prove a roadblock to reaching FID and full-scale production.Recent analysis has suggested that eventual imports of hydrogen and ammonia may be lower than announced 2030 targets globally,owing to infrastructure lead times and insufficient policy support to achieve government targets(e.g.co
292、-firing ammonia for power in East Asia)19.However,even if this does hold true,there would still be the potential for projects to reach FID with local offtakers.Measures such as the Australian Governments recent reform of the Safeguard Mechanism,which targets a gradual reduction of emissions limits,o
293、r“baselines”,for large industrial facilities down to net-zero by 2050 are likely to aid in accelerating the domestic demand for clean energy vectors,including hydrogen or ammonia.Supporting industrial clusters is also a priority of the Australian government,which is running a Regional Hydrogen Hubs
294、programme,allocating$526 million towards the establishment of 8 future hubs.19.BNEF estimates global hydrogen imports demand to be 3x lower than export supply by 2030.Hydrogen Export:Tough Competition Ahead(BNEF,2022).Feasibility evaluationFuelling the decarbonisation of iron ore shipping between We
295、stern Australia and East Asia with clean ammonia44Global clean ammonia availabilityThe landscape of announced projects suggests that global clean ammonia production should be well above the volumes required in the corridors kick-off phase.As shown in Figure 13,there are currently 20 clean ammonia pr
296、ojects with production capacities of greater than 0.5 million tonnes expected to hit operation globally by 2028.Of these projects,2 have reached FID,with the remaining projects in a pre-FID stage,i.e.concept phase or undergoing feasibility studies.Because shipping ammonia is expected to have a minim
297、al impact on its final delivered cost,offtake and imports from these projects to Western Australia,Singapore,or other ports on the corridor would be an additional pathway for procuring the required fuel.Figure 13:Global map of clean ammonia projects with planned online dates in 2028 or earlier20.HyR
298、esource(2023),IEA Hydrogen Projects Database(2022).20.Totals shown here only include projects greater than 0.5 MtNH3/y capacity and for which online dates are announced at the time this study was conducted.Mt of green(renewable)NH3Norway1.0FID0 projectsFeasibility1 projectsConcept0 projectsDate onli
299、ne:2025UAE1.0FID0 projectsFeasibility1 projectsConcept0 projectsDate online:2025USA3.8FID1 projectsFeasibility2 projectsConcept0 projectsDate online:2025-2027Canada1.0FID0 projectsFeasibility0 projectsConcept1 projectsDate online:2026Sweden0.6FID0 projectsFeasibility1 projectsConcept0 projectsDate o
300、nline:2026Denmark0.6FID1 projectsFeasibility0 projectsConcept0 projectsDate online:2027South Africa0.6FID0 projectsFeasibility1 projectsConcept0 projectsDate online:2026Chile13.4FID0 projectsFeasibility3 projectsConcept3 projectsDate online:2025-2028Ireland0.5FID0 projectsFeasibility0 projectsConcep
301、t1 projectsDate online:2028Egypt1.0FID0 projectsFeasibility0 projectsConcept1 projectsDate online:2025Australia2.3FID0 projectsFeasibility0 projectsConcept1 projectsDate online:2027New Zeland1.3FID0 projectsFeasibility1 projectsConcept0 projectsDate online:2024India1.3FID0 projectsFeasibility0 proje
302、ctsConcept1 projectsDate online:2026xxMt of blue(low carbon)NH3xxSaudi Arabia1.2Underconstruction1 projectsDate online:2026Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia45Overall,supply outlooks suggest the corridor
303、will represent a modest 0.5-1%share of global clean ammonia production.In the ramp-up phase for the corridor between 2028-2035,outlooks for global clean ammonia production suggest demand from the corridor will represent between 0.3-0.7%of global supply.Based on global production estimates from the M
304、PP Ammonia Sector Transition Strategy,the corridors long-term ammonia demand between 2035-2050 would continue to account for 1%or less of total clean ammonia production.As such,there are unlikely to be constraints on securing clean ammonia in the period between 2030-50.Figure 14:Global clean ammonia
305、 supply outlooks(top)and share of supply against corridor demand for each outlook(bottom)21 22.Sources:IEA Hydrogen Projects Database(2022);MPP Ammonia Sector Transition Strategy(2022);ETC Analysis(2023)21.IEA Near-term Outlook:Based on speculative/announced projects with start-up dates to 2030;excl
306、udes 33 Mt clean ammonia per year capacity from projects without an announced production start date.22.MPP STS Outlook(Lowest Cost):Long-term global production outlook taken from Mission Possible Partnerships Ammonia Sector Transition Strategy;Lowest Cost is the net-zero scenario for decarbonizing t
307、he ammonia sector while optimising for lowest cost of production;it assumes a carbon price starting at US$10/t in 2026 and reaching US$100/t by 2035.40050060030020010000.7%0.8%0.9%0.6%0.00.20.4%0.60.81.0202220222024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 20502030 20352040 2045 2
308、050405060302020282025Mt of NH3Percent of annual global clean NH3 supplyCorridors share of clean NH3 supply in:see next chartIEA near-term OutlookMPP STS Outlook(Lowest Cost)Global clean ammonia supply outlooksAustralia-East Asia iron ore green corridor representative share of global clean
309、 ammonia supplyMPP STS Outlook(Lowest Cost)IEA Near-term OutlookFeasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia46While production volumes for many projects are expected to be higher than the corridors kick-off demand,
310、shipping is not the only sector that will be seeking to secure volumes from the initial wave of global projects.As shown in Figure 15,by 2030,the global fertiliser and industrial sectors could account for 22 million tonnes of clean ammonia demand in a net zero-aligned future,exceeding expected deman
311、d from shipping,at around 20 million tonnes.Figure 15:Global clean ammonia demand outlook to 2030 for power,shipping,and fertilisers&other industrial sectors23.Sources:ETC analysis(2023)based on Ammonia Sector Transition Strategy(MPP,2022),Making Hydrogen Economy Possible(ETC,2021)Indeed,market lead
312、ers in fertilisers(e.g.CF Industries,Nutrien,OCI N.V.24)have already started securing clean ammonia supply at scales of up to 1 million tonnes per year,starting 2025-2027.This presents a potential opportunity for the shipping sector,including actors interested in the development of this corridor,to
313、collaborate on joint offtakes to help clear minimum offtake requirements.But securing fuel supply will still come with a degree of risk.To mitigate against these risks,in the kick-off phase of the corridor,potential fuel buyers,including cargo owners and shipowners,could seek to:Register interest in
314、 and negotiate offtakes with relevant producers and projects early in pre-FID project phases.Support the development of relevant demand-driving policies,such as CfDs and mandates.Engage in dialogue with fuel providers regarding commercial frameworks that reflect risk and benefit sharing(on which see
315、 below).23.Forecasted ammonia demand is taken from MPP Ammonia STS Lowest Cost scenario.Power demand is based on ammonia import targets from Japan and the Republic of Korea.Shipping demand is based on an S-curve,with ammonia use starting in the mid-2020s and reaching a 55%share of total fuel use by
316、2050,per DNV low electricity cost-high ambition modelling scenarios.Fertiliser and other industry demand growth follows a business-as-usual trajectory,with clean ammonia estimated to reach 10%of total ammonia demand by 2030.Further details can be found in the MPP Ammonia STS Technical Appendix.24.CF
317、 Industries have signed an MoU with JERA for the supply of up to 0.5Mt/yr of clean ammonia by 2027;Nutrien has partnered with thyssenkrupp for 1.2Mt/yr clean ammonia project,with FID in 2023 and full production expected by 2027;OCI N.V.has broken ground on a 1.1Mt/yr blue ammonia site in Texas,produ
318、ction to start in 2025071819 20 212210MT NH3 in 2030PowerShippingFertilisers&other industryClean ammonia demand outlook by sector72022Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia473.2.2 Enabli
319、ng mechanismsIn addition to enough clean ammonia being available,a number of mechanisms will need to be in place to facilitate the corridor securing this fuel.Two key enabling mechanisms are addressed in this section:Fit-for-purpose contractual models.This sub-section compares the various challenges
320、 buyers and suppliers could face in contracting for new zero-emission fuels and suggests potential solutions different actors can take to address these challenges.Clean ammonia certification.One of these solutions,clean ammonia certification,is investigated in greater detail.Ongoing activities on cl
321、ean ammonia verification,tracking and registries are explored,forming an outlook on when a framework to assure GHG emissions reductions from clean ammonia could be in place.Bridging fuel supply contracting challengesMultiple solutions will be required to address challenges in initial clean ammonia c
322、ontracts.Figure 16 presents a simplified value chain for the corridor,highlighting the potential contractual relationships between the various actors involved.They are split into three core groups:The demand side of the corridor,represented by shipowners and cargo owners.These actors have contractua
323、l agreements between themselves,in the form of charter contracts,as well as downstream,with fuel suppliers The supply side,represented by physical suppliers/barge operators and fuel producers.These actors typically have additional fuel supply contracts between each other Other stakeholders,including
324、 governments and port authorities,who may influence fuel supply contracts via policy incentives and/or support mechanisms for producers It is expected that cargo owners will have either a fuel term contract to purchase clean ammonia from a fuel supplier or a direct offtake agreement with a fuel prod
325、ucer,although configurations in which shipowners sign fuel term contracts are also possible.In all cases,the demand and supply sides will have requirements relating to the agreements,summarised at the bottom of Figure 16;these requirements will need to be balanced in an equitable way that works for
326、both sides in order to move forwards.Feasibility evaluationFuelling the decarbonisation of iron ore shipping between Western Australia and East Asia with clean ammonia48Figure 16:Simplified value chain structure for the corridor,with potential fuel contracting challenges 25,26,27.A core challenge fa
327、cing the supply side is bankability,i.e.the ability to attract investment,with clean ammonia production projects requiring a level of revenue certainty to achieve final investment decisions and access financing.For this reason,long-term fuel agreements are likely to be of importance for at least the
328、 initial period of the corridors operation.To help bridge other risks and requirements,these agreements could include:Clauses relating to uncertainties on both the buyer side,such as clauses for adjusting fuel delivery dates or volumes in the case of delays in bunkering or vessel readiness,and suppl
329、y side,such as clauses which allow for adjustments depending on policy development and confirmed levels of support.Ramp-down mechanisms or price discounts in subsequent delivery phases to avoid locking-in initial prices as fuel production increases,reducing the cost of producing clean ammonia.Policy
330、 support and/or green premia will also be required as part of the overall framework to reduce costs and risks for the buyer,namely paying high fuel prices,and supplier,namely covering high production costs.25.Diagram does not cover all nuanced contractual flows.In some cases,fuel producers and physi
331、cal supplier/barge operators may be the same entity.26.Potential measures include:Contracts for Difference tax incentives,government backed offtakes or guarantees,government purchases of low-carbon fuel,fuel mandates,legislated performance standards,loans or equity co-investments,public-private part
332、nerships.27.COA(Contract of Affreightment)refers to an agreement between an owner and a charterer for the carriage of a certain amount and type of goods between agreed ports over a given period of time.BAF(Bunker Adjustment Factor)refers to an additional surcharge levied on the ship operators to com
333、pensate for the fluctuations in fuel prices(imposed to make up for the extra charges incurred during the shipment of goods).Green charter contracts including index linked/BAF/low carbon fuel floating pricing mechanisms Assurance of the carbon intensity of clean fuels and systems/certificates to ensure the benefit is conferred to the correct parties Risk of lock-in at initial high fuel prices befor