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transports LPG Ammonia changes the game
Ammonia changes the game
Globally, shipping discharges almost a billion tons of carbon dioxide into the atmosphere each year.
COMPANIES IN THE MARITIME SECTOR MUST DRASTICALLY REDUCE THEIR CARBON FOOTPRINTS OVER THE NEXT 30 YEARS. THIS CHALLENGE WILL DISRUPT THE COMPETITIVE DYNAMICS OF TODAY’S INDUSTRY AND MARITIME COMPANIES WILL SEE THEIR FORTUNES RISE AND FALL DEPENDING ON THE SUCCESS OF THEIR TRANSITION STRATEGIES. THE STRATEGIC LANDSCAPE IS COMPLEX, WITH MANY VARIABLES AT PLAY.
ALL PHOTOS COURTESY BY CARBON NEUTRAL CONSULTING UNLESS MENTIONED OTHERWISE.
The Ammonia Report, produced by Carbon Neutral Consultng (CNC), brings a radically diferent perspectve to this conversaton. It argues that ammonia may hold the key to a dominant strategy for companies throughout the maritme sector.
No time to lose
“Globally, shipping discharges almost a billion tons of carbon dioxide into the atmosphere each year”, says Stephen Crolius, Co-Founder of Carbon Neutral Consultng (CNC) and co-author of The Ammonia Report. “The IMO’s inital GHG strategy calls for a 50% reducton in the sector’s GHG emissions versus a 2008 baseline. Yet, at this point in tme, of a sample of 500 companies with hard assets at stake, just 20% have a clear decarbonisaton strategy in place. We believe companies have no tme to lose in rising to this challenge.”
The Ammonia Report
The Ammonia Report is not an endorsement of ammonia as a bunker fuel. Rather, it is an endorsement of strong strategic planning that can enable maritme companies to thrive through a mult-decade period of disrupton. The report marshals informaton from dozens of sources to put ammonia in context. It argues that ammonia’s presence within the decarbonisaton opton set changes the strategic calculus in important ways. Companies who understand this, and build their business strategies accordingly, will have a compettve advantage over those who do not. Co-Founder Trevor Brown now serves as Executve Director of the Ammonia Energy Associaton, following his pioneering work in the nascent feld of low-carbon ammonia producton. “We saw the relevance of ammonia energy to the maritme sector even before the IMO outlined its inital strategy for reducing GHG emissions in 2018”, Mr Crolius says. “Over the last three years, we have had the opportunity to interact with companies in many diferent maritme industries and we have studied the key developments. We came to realise that the ammonia fuel concept could have farreaching implicatons that maritme companies could use to their advantage.” The Ammonia Report co-author Milton Bevington explains further, “In game theory, a ‘dominant strategy’ is a strategy that leaves you beter of no mater what your compettors do in response. Dominant strategies are rare in business contexts because we are usually faced with optons that have an upside if our compettors react one way and a downside if they react in another. Right now, for companies in the maritme sector, an ammoniaoriented acton plan comes very close to being this kind of ‘dominant strategy’ – a business plan that enables commercial success across a period of intense disrupton regardless of the actons of your compettors. The critcal queston, which The Ammonia Report answers, is how can this strategy be rolled out via practcal actons in the current environment?”
A springboard for a new strategy
The 64-page report describes the business risks that fow from the Internatonal Maritme Organizaton’s most recent Sulphur and GHG emissions initatves. It reviews the range of fuel choices through the lens of current and emerging regulatory initatves and identfes ammonia as a potentally well-qualifed alternatve. It then considers the degree of challenge involved in scaling ammonia up as a major maritme fuel. At its culminaton, The Ammonia Report presents a business strategy for companies within the maritme sector and outlines steps for implementaton. “We have been impressed by the thoughtul approach taken by the maritme companies we’ve been speaking with,” Mr Crolius says, “but the complex and rapidly evolving situaton makes it hard to formulate a long-term plan. The Ammonia Report will serve as a springboard for the creaton of a company-specifc strategy and efectve plan of acton.”
