Francis Kokutse, in Accra, Ghana
Francis Kokutse is a journalist based in Accra and writes for Associated Press (AP), University World News, as well as Science and Development.Net. He was a Staff Writer of African Concord and Africa Economic Digest in London, UK.
It is not all gloom for Africa’s maritime
With North-West Africa likely to benefit from a major research on green ammonia’s importance to the maritime industry, this should lift the hopes of industry players on the continent. The industry has been faced with some fears over the past few months that the situation in the Middle East will have serious effects on maritime activities on the continent. Despite these misgivings, what has been said about green ammonia should play down on all gloomy pictures that have been painted.
Admittedly, Africa has always suffered colds from coughs outside the continent. It was these coughs from the Russian-Ukraine war that caused disruption in food supplies on the continent. This time around, another cough from the Red Sea is pushing shipping rates due to the Houthi attacks to cause trade disruption.
According to the UK’s Economist Intelligence Unit (EIU), as of early January 2024, global shipping rates have skyrocketed to their highest since late 2022 primarily fueled by trade disruptions in the Red Sea.
“The Houthi attacks in this region are forcing carriers to reroute, notably avoiding the Suez Canal, and opting for longer paths like the Cape of Good Hope. This situation has created an unprecedented spike in shipping costs,” they added. Although Western economies will bear the brunt of the disruption, the EIU expects the resulting price spikes to be temporary, with minimal impact on supply-side inflation. “Nevertheless, the dynamics will feature in the discussions of some monetary policymakers in 2024, given concerns that higher transport costs will bleed into pricier domestic retail and wholesale goods,” they added.
Freightos Baltic Index, which the EIU said is the global sea freight prices (in the form of 40-foot container spot prices), surged by 87.8 percent week on week in early January, with routes connecting China/East Asia to the Mediterranean (up 115.3 percent, to $5,169) and North Europe (up 176.2 percent, to $4,391) registering the largest movements.
They said recent developments may be a boon for the shipping industry, which suffered from longstanding issues of overcapacity (and depressed freight rates) in the decade before covid‑19. The rush to respond to trade disruption prompted further investment into new shipping capacity in 2021‑22, but supply came on stream only after trade demand fell in 2023.
“The latest price surges may return the shipping industry to a period of profitability, which could allow the industry to weather this mismatch better. This will probably be temporary, however, and will not fully erase the overcapacity dynamics that will keep global freight rates below pandemic‑era levels,” the EIU added.
Despite this, what should be of some joy to the maritime industry in Africa is the study published in the IOP Publishing’s journal, ‘Environmental Research, Infrastructure and Sustainability’, which found that green ammonia could be used to fulfil the fuel demands of over 60 percent of global shipping by targeting just the top 10 regional fuel ports.
An expert on the subject, Shawn Maholick, said ammonia is generated by combining nitrogen extracted from the air with hydrogen produced by water electrolysis powered by wind or solar energy. It may be a green fertiliser or, according to supporters, a clean, low-emission fuel for ships and planes. (https://www.maholick.com/blog/post/green-shipping-ammonia-as-hydrogen-carrier-and-marine-fuel/)
As this colourless fuel is burnt, it produces no carbon dioxide. It is plentiful and common, and it is made with green energy, water, and air. It can be used in both fuel cells and internal combustion engines. It does not require the use of high-pressure tanks or cryogenic dewars, unlike hydrogen. It also has a 10x higher energy efficiency than a lithium-ion battery.
Maholic said maritime transportation contributes significantly to greenhouse gas emissions. Maritime Shipping on the world’s oceans is reportedly responsible for about 2.6 percent of global CO2 emissions, according to data given by the German Environment Agency (UBA). In 2015, about 932 million tonnes of CO2 were released, and this number continues to rise year after year.
“The use of green ammonia instead of traditional fuel oil may be a cost-effective way to reduce greenhouse gas pollution from ships. The energy density of liquid ammonia is around 18.6 MJ/kg, which is one of its properties. It is far less expensive than today’s marine oils, natural gas, and LPG. As a result, ammonia has a reduced energy density. Ammonia has the benefit of being able to be contained in a liquid state at higher temperatures and under air pressure” he added.
Maholick said ammonia is produced at a cost of around $55 billion (£42 billion) per year, primarily for fertiliser. However, the sector has a significant environmental impact, contributing 1.8 percent of global CO2 emissions. Fertilisers may also harm water and air quality. Nitrogen and hydrogen gases are needed for the production of ammonia. Hydrogen is often derived from natural gas (methane). The method emits carbon which necessitates a large amount of power.
He said green ammonia, on the other hand, created by electrolysis using renewable or nuclear energy, is a great source of zero-emission fuel if NOx (nitrogen oxides) emissions are properly handled. Green ammonia is currently manufactured in marginal quantities, and a major investment campaign will be needed not only to generate a meaningful supply of green ammonia but also to bring down the costs of doing so, making the fuel commercially feasible for the shipping industry.
The IOP researchers looked at the production costs of ammonia which are similar to very low sulphur fuels, and concluded that the fuel could be a viable option to help decarbonise international shipping by 2050.
They said some $2 trillion will be needed to transition to a green ammonia fuel supply chain by 2050, primarily to finance supply infrastructure. The study shows that the greatest investment need is in Australia, to supply the Asian markets, with large production clusters also predicted in Chile (to supply South America), California (to supply Western U.S.A.), North-West Africa (to meet European demand), and the southern Arabian Peninsula (to meet local demand and parts of south Asia).
Ninety percent of the world’s physical goods trade is transported by ships which burn heavy fuel oil and emit toxic pollutants. This accounts for nearly three percent of the global greenhouse gas (GHG) emissions. As a result of this, the International Maritime Organisation (IMO) was committed to decarbonising international shipping in 2018, with the aim to halve GHG emissions by 2050. These targets have been recently revised to net zero emissions by 2050.
After investigating the viability of diesel vessel exhaust scrubbers, green ammonia, made by electrolysing water with renewable electricity, was proposed as an alternative fuel source to quickly decarbonise the shipping industry.
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