Norwegian fertilizer producer Yara's low-carbon arm, Yara Clean Ammonia, has signed a time-charter contract with Japanese shipowner NYK Line for an ammonia-fuelled medium gas carrier (AFMGC) for delivery in 2026.
The 40,000m ³ AFMGC will deliver to Yara in November 2026. The vessel is being built by Nihon Shipyard in Japan. The period for the time charter and rate have not been disclosed.
The two firms have been collaborating on a joint study evaluating the viability of an ammonia fuelled gas carrier since 2021.
The vessel's main engine will be a dual fuelled two-stroke engine developed by Japan Engine Corporation. An auxiliary four-stroke engine produced by Japan's IHI Power Systems will also have an ammonia dual-fuel capability.
Ammonia dual-fuel engines co-fire ammonia with fuel oil, meaning a high ammonia co-firing rate is required to achieve a high greenhouse gas (GHG) emission reduction. The AFMGC could achieve a GHG reduction of 80pc or more, according to NYK Line. This would also be contingent on the emissions profile of the ammonia used.
The AFMGC will help Yara comply with emission regulations for sea going-vessels, as well as reducing overall well-to-wake emissions of Yara's shipped products. Yara already operates the world's largest ammonia network, with an existing fleet of 15 ships.
The European Union's FuelEU maritime legislation came into force from 1 January 2025, requiring ship operators traveling in, out or within EU territorial waters to reduce their GHG emissions by 2pc on a lifecycle basis this year. The reduction jumps to 6pc from 2030, incrementally increasing to 80pc by 2050.
Ship operators must also surrender EU emissions trading system allowances (EUAs) to cover 70pc of emissions this year, up from 40pc in 2024. In 2026, that rises to 100pc.
Between 1 January 2025 and 31 December 2034, every tonne of renewable fuel of non-biological origin will count twice towards GHG emission reduction targets. And after 2034 a 2pc mandate for hydrogen derivatives alternative fuel use kicks in. This means Yara could benefit from the multiplier if it runs the AFMGC on renewable ammonia.
And the pooling mechanism of FuelEU maritime would allow any additional GHG emission reductions which are above the required threshold to be spread amongst the rest of Yara's fleet.
Yara has its own renewable ammonia production at its Porsgrunn plant which is currently used in low-carbon nitrate fertilizer production. But the company has also signed several offtake agreements for third-party renewable ammonia procurement, including with India's Acme and Norway's Scatec.
The International Maritime organisation approved interim guidelines for the safe use of ammonia as a marine fuel in December 2025, but its use as a fuel remains prohibited under the International Code for Construction and Equipment of Ships Carrying Liquified Gases in Bulk (IGC Code). The prohibition of ammonia as a marine fuel is expected to be removed in September 2025, but bunkering infrastructure for ammonia remains nascent for now.
