Six Korean Companies Including HMM and POSCO Unite for Green Ammonia Production and Distribution

[Asia Economy Reporter Dongwoo Lee] HMM announced on the 25th that it has signed a 'Green Ammonia Maritime Transport and Bunkering Consortium Memorandum of Understanding (MOU)' together with Lotte Fine Chemical, Lotte Global Logistics, POSCO, Korean Register, and Hyundai Heavy Industries Group to lead the eco-friendly ship and shipping market.

This is the world's first consortium formed within a single country by global-level companies covering the entire value chain including green ammonia production, distribution, ship development, and operation.

Ammonia is gaining attention as a green hydrogen carrier and eco-friendly energy source in global carbon neutrality policies. Through this agreement, each company pledged to share their expertise in ammonia production and distribution infrastructure as well as in the shipbuilding and shipping industries, and to jointly strive for the rapidly growing green ammonia market expected in the future.

As part of the consortium cooperation plan, Hyundai Heavy Industries Group will develop ammonia-powered ships and bunkering vessels, Korean Register will conduct certification, and HMM and Lotte Global Logistics will operate the vessels. POSCO will produce green ammonia overseas, which Lotte Fine Chemical will transport, store, and bunker.

According to policies announced by the International Maritime Organization (IMO), greenhouse gas emissions from ships must be reduced by 50% compared to 2008 levels by 2050. Existing fossil fuel-based ship fuels are expected to be gradually replaced by eco-friendly ship fuels such as ammonia and hydrogen. The International Energy Agency (IEA) released a '2050 Carbon Zero Roadmap' report on the 18th, forecasting that ammonia will account for 45% of ship fuel demand by 2050. Based on the current ship fuel market size and ammonia prices, this equates to approximately 100 trillion KRW.

Lotte Fine Chemical has the largest ammonia storage facilities in Korea, handling about 70% of domestic distribution, and ranks third worldwide in purchase volume for a single company. POSCO announced plans last December and this March to convert green hydrogen produced in Australia into ammonia and import it to Korea. The company plans to promote green ammonia production projects in collaboration with global companies.

Hyundai Heavy Industries Group recently declared the establishment of a hydrogen value chain within the group and obtained a basic certification for ammonia-powered ships from Lloyd’s Register in the UK last July. The companies participating in the consortium are moving swiftly in line with new energy trends.

Earlier on the 18th, the U.S. Biden administration was reported to be considering imposing a carbon fee on imports, similar to the carbon border tax urged by the European Parliament in March. The transition to green energy has become an urgent task to maintain manufacturing competitiveness. However, due to limitations in procuring large amounts of green energy such as solar power domestically, importing green hydrogen produced overseas is being considered.

The signing ceremony for this agreement was held at the Signiel Hotel in Jamsil, Seoul, attended by Choi Jong-cheol, HMM Maritime General Manager; Jung Kyung-moon, CEO of Lotte Fine Chemical; Park Chan-bok, CEO of Lotte Global Logistics; Yoo Byung-ok, Vice President of POSCO; Lee Hyung-chul, Chairman of Korean Register; and Kim Sung-joon, Director of Hyundai Heavy Industries Group Future Technology Research Institute. The consortium expects ammonia to play a key role as a 'hydrogen carrier' for storing and transporting hydrogen.

An HMM official stated, “We have declared a mid-to-long-term goal of ‘carbon neutrality by 2050,’ the second among global shipping companies, demonstrating a strong commitment and plan to actively respond to climate change,” adding, “We will take the lead in developing eco-friendly fuels in collaboration with companies and institutions possessing expertise in environmental fields.”

This content was produced with the assistance of AI translation services.