Will carbon transport and storage limit blue fuel availability for the maritime industry?

Blue ammonia is an attractive alternative fuel for the maritime industry due to its potential to scale up quickly using existing technologies and its low production costs compared with other low-emission fuels. Like conventional, gray ammonia, blue ammonia is produced from natural gas, but carbon capture and storage (CCS) is used to capture, transport, and permanently sequester the CO₂ byproduct, thereby yielding a fuel with low well-to-wake emissions.

Carbon storage is an established technique where captured CO₂ from industry is transported to a long-term storage location. Several sites have been in operation for decades. However, the volumes of CO₂ currently stored are small relative to the expected demands for the energy transition. As a result, carbon storage availability will need to increase significantly for blue ammonia to be a viable option for decarbonizing the maritime industry.

To find out more about the global potential for carbon storage, we analyzed whether potential carbon storage in CCS networks can meet the expected demands from blue ammonia production for maritime in the context of the wider demand for CCS from other industries. We also studied potential constraints on CCS and blue ammonia availability, including industry ramp-up plans, equipment supply, public policy, permitting time, infrastructure costs, operating costs, and cross-sectoral competition.

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Our findings showed that global CO₂ transport and storage capacity is expected to expand dramatically over the next few years. As a result, CO₂ storage capacity will not prevent blue fuel availability from meeting the anticipated demand from the maritime industry by 2030. Most of the expansion in CO₂ storage by 2030 is likely to come from regional hub projects serving multiple industries and emitter sites, rather than single sites with individually dedicated storage. This arrangement is beneficial, as it allows the infrastructure development costs to be shared and drives down the cost per tonne of CO₂ storage.

Regulatory barriers to increasing CO₂ storage appear to be surmountable on a global scale. Several countries expected to be key to large-scale blue fuel production have already established supportive national policies and incentives for CCS. Characterization, permitting, planning, and construction of new CO₂ storage sites can take several years, resulting in a time delay in establishing new capacity. Nevertheless, areas with established oil and gas production generally have well-characterized geology, which can help to reduce the characterization and permitting times.

We expect blue fuel production locations to be concentrated in areas with access to low-cost natural gas and CO₂ storage. As a result, we analyzed the suitability for blue fuel production of each of the major gas exporting countries/regions and identified several countries/regions most suitable for blue fuel production. We also estimated likely production costs for blue ammonia in each of these regions, which range from 480 to 600 USD/t, excluding the impact of tax incentives.

Overall, our analysis indicates that CO₂ storage capacity is unlikely to constrain the availability of blue ammonia for shipping by 2030.