Fortescue wants the International Maritime Organization to impose a carbon levy of $100/mt on marine energy consumption to make "green ammonia" competitive as a marine fuel, Executive Chairman Andrew Forrest said March 9.
Member states of the IMO, a UN agency tasked with regulating international shipping, are due to finalize new regulations on greenhouse gas emissions from vessels this year, which will be implemented in 2027 to accelerate the industry's low-carbon transition.
During an industry event in London, Forrest suggested a levy of $100 per mt of CO2-equivalent on maritime emissions could help bridge the price gap between green ammonia -- ammonia produced from renewable hydrogen -- and conventional, oil-based fuels.
"Everyone wants a level playing field, wants a market signal ... for a proper transition," Forrest said.
Fortescue, one of the largest Australian miners, has been developing renewable hydrogen and ammonia plants while planning to supply ammonia bunkers and use ammonia to decarbonize its shipping fleet.
If the IMO includes the levy in its coming regulations, Fortescue will pay it when charting ships to transport its products and will have no trouble passing the incremental cost on to its customers, according to the chair.
"We will be paying it and billing it in the bill ... Our customers will be so much happier," said Forrest, displaying confidence in the customers' environmental credentials.
In addition to the levy, the IMO should provide "clear and effective" financial rewards for hydrogen-based e-fuels like green ammonia and "a stringent global fuel standard" to lower marine energy's GHG intensity, Forrest added.
"The International Maritime Organization must ... fast-track shipping's transition to green fuels," Forrest said, adding that "there is no time to waste on so-called transitional fuels" like LNG and biofuels.
The most competitive price for green ammonia delivered to Far East Asia was $47.6/Gigajoule on average in January, according to Platts(opens in a new tab) global bunker cost calculator. The B24 biobunker fuel price was $17.67/Gj, LNG was $16.96/Gj, and 0.5%-sulfur fuel oil was $14.22/Gj in Singapore.
Ammonia supply
Forrest's comments came after Fortescue's pilot ship Green Pioneer, the world's first designed to be powered by ammonia, fueled with one mt of ammonia in Southampton on March 5.
Ammonia is highly toxic and corrosive despite its decarbonization potential, and the world's first ammonia-powered ships in deepsea trade will only hit the waters later this decade. Fortescue developed the ship to showcase the technical feasibility of ammonia as a marine fuel globally, and Green Pioneer completed the world's first ammonia bunkering in Singapore in March 2024 before Europe's first in the UK port.
With a target of net zero Scope 3 emissions by 2040, company executives suggested Fortescue could acquire ammonia-capable dry bulk carriers via retrofits or charter projects by the end of this decade as an initial step. It has also signed a memorandum of understanding with China Cosco Shipping Corp. to develop such ships.
Last year, the company shelved its target to produce 15 million mt/year of green hydrogen by 2030 and 50 million mt/year by 2040 due to the high costs of renewable electricity – a large proportion of the production was expected to generate ammonia. However, Fortescue executives said the company still plans to make green ammonia commercially available in Australia and Singapore to shipping companies from 2027.
"I'm whipping my team every single day ... just give us a couple of years," Forrest said.
