Japan's ambitions for ammonia as a fuel will have the knock-on effect of increased use of LPG infrastructure as well as its use as a bunker fuel, writes Reina Maeda
The number of new LPG-fuelled VLGCs either on order or already delivered to Japanese companies increased to 22 last month, as demand for the vessels continues to grow in the country. This aligns with Japanese aims to transition the power and maritime sectors to renewable ammonia by 2050, something that will require the use of LPG storage infrastructure and VLGCs.
Japanese firms have been increasingly investing in dual-fuel capable VLGCs that can transport LPG and ammonia, in order to lower maritime emissions and prepare for the transition to renewable ammonia as a bunker fuel. Domestic shipbuilders have delivered seven LPG-fuelled VLGCs so far this year since Kawasaki Heavy Industries (KHI) delivered its first LPG-fuelled VLGC in September 2021 to Japanese LPG importer Astomos. Another two are due to be commissioned in the final two months of this year (see table).
The use of renewable ammonia as a fuel, not only in the maritime sector, is on course to grow in the coming years as part of the energy transition, despite concerns over its toxicity. Japan is targeting expanding ammonia fuel use to 3mn t/yr by 2030 and to 30mn t/yr by 2050 under plans to establish 20pc ammonia co-firing at domestic coal-fired power generation plants by 2030 and the first fully ammonia-fired power plants by 2050.
The growing use of ammonia for power generation should help increase LPG's adoption as a bunker fuel, the Japan LPG Association (JLPGA) says — with LPG-fuelled ships eventually converted to run on ammonia when adequate supply and refuelling infrastructure emerges. Ammonia and propane have similar characteristics — the former can be stored as a liquid at -33°C and the latter at -42°C. But consumption of LPG as a bunker fuel is not yet measured in Japan because the fuel is fed from the cargo tank, the association says. Dual-fuel VLGCs can also use their alternative fuel option, usually fuel oil, depending on emissions regulations and cost.
Japanese firms such as refiner Idemitsu and trader Mitsubishi with propane storage facilities are also looking at the possibility of converting them to store ammonia in the future. These conversions can support the development of fuel ammonia supply chains in Japan, the country's Clean Fuel Ammonia Association (CFAA) president Shigeru Muraki said in September. The storage tanks can be converted without major modifications, although ammonia's corrosive nature needs to be addressed, Muraki said.
Regional hubs
The CFAA is looking at two regions in Japan that could become ammonia fuel hubs given they have LNG import terminals and LPG storage infrastructure — Chubu in central Japan and Setouchi in the west. Idemitsu owns suitable LPG storage facilities in Hekinan in Chubu's Aichi prefecture, according to Muraki. Japan's largest power generator Jera is looking at co-firing ammonia at its Hekinan coal-fired power plant from the late 2020s after it completes an ongoing demonstration project. A cross-industry group is also targeting 1.5mn t/yr of ammonia demand in Chubu by 2030 and 6mn t/yr by 2050.
Idemitsu has further LPG storage units in Tokuyama in Setouchi, at the Shunan industrial complex that consists of petrochemical, steel, cement and chemical plants. Another industry group including Idemitsu aims to establish supply of more than 1mn t/yr of carbon-free ammonia by 2030 at the complex. Mitsubishi owns LPG storage space at its Namikata terminal on Shikoku island, where a consortium of companies including Mitsubishi plans to convert the terminal to receive 1mn t/yr of ammonia by 2030. Hekinan, Tokuyama and Namikata had propane storage tank capacities of 52,460t, 58,000t and 136,000t, respectively, as of September 2022, JLPGA data show.
