Fortescue to charter green ammonia-powered vessel to test shipping with no dirty bunker fuel

Andrew Forrest’s green metals and energy giant Fortescue has inked a fresh deal in support of emissions-free shipping, chartering a new ammonia-powered vessel that will ship iron ore from the Pilbara to customers in China and around the world.

Fortescue has already set a target of “real zero” emissions on its terrestrial iron ore operations in the Pilbara by 2030 – meaning it will burn no gas or diesel for electricity or transport. It is also turning its attention to so-called “scope 3” emissions, which because it involves shipping is harder to do.

The deal with Bocimar, a subsidiary of Belgian maritime group CMB.Tech, will see a Newcastlemax vessel with 210,000 dwt (dead-weight tonnage) delivered to Fortescue by the end of next year, a statement from the company said on Monday.

The ship will feature a dual-fuel engine, making it capable of operating on ammonia that can be created using renewable energy.

CMB.Tech owns and operates more than 150 seagoing vessels, incluing crude oil tankers, dry bulk vessels, container ships, chemical tankers and offshore wind vessels.

In January 2023, CMB signed a major deal on the development of ammonia-fuelled two-stroke engines, with CMB CEO Alexander Saverys describing ammonia as “the most promising zero-carbon fuel for deep sea vessels.”

Last year, Fortescue signed a Memorandum of Understanding (MoU) with Chinese shipping giant Cosco to explore the construction and deployment of Cosco Shipping vessels, or co-owned vessels, also powered by green ammonia.

The Fortescue Green Pioneer, the world’s first class society approved dual-fuel ammonia-powered vessel, is preparing to embark on a tour of global ports to bring attention to the need for a hastened transition to zero emissions fuels.

Fortescue Metals CEO Dino Otranto says the deal with Bocimar sends a fresh signal to the market for shipowners to invest in ammonia-powered ships.

“The days of ships operating on dirty bunker fuel, which is responsible for three per cent of global carbon emissions, are numbered,” Ottranto said on Monday.

“Our agreement with Bocimar is just the beginning and is a critical step in addressing our Scope 3 emissions. Through the Fortescue Green Pioneer we have demonstrated that the technology to decarbonise shipping exists now.

“We will continue to work with like-minded companies like Bocimar to transition our fleet to low and zero-emissions vessels and help accelerate the widespread adoption of green ammonia as a marine fuel.”

Alexander Saverys, CEO of CMB.Tech, says the new deal with Fortescue is born of the two companies’ same values and shared passion for decarbonising the maritime industry.

“Based on our common belief that green ammonia is the fuel of the future, we were able to conclude this important agreement on the road to zero emission shipping,” Saverys said.

“This is the beginning of an exciting journey to build more ammonia-powered ships that will stimulate more green ammonia production projects. We need to decarbonise today to navigate tomorrow.”

The deal comes follows last week’s landmark international deal to cut greenhouse gas emissions from global shipping, setting mandatory fuel standards and introducing an industry-wide carbon pricing mechanism.

The framework, agreed during the UN International Maritime Organization (IMO) Marine Environment Protection Committee, aims for net-zero emissions from the sector by 2050 and will be formally adopted in October before coming into force in 2027.

The framework will apply to large ocean-going vessels over 5,000 gross tonnage, which collectively account for 85 per cent of carbon dioxide emissions from the global marine shipping fleet.