Chemical tankers: the future of hydrogen transport

• The 2020s demand practical, cost-effective solutions to meet ambitious decarbonisation targets, with hydrogen playing a crucial role in sectors where direct electrification is not feasible.

• Transporting hydrogen directly is less efficient and costlier due to the need for complex infrastructure, making chemical carriers like ammonia more viable for long-distance transport.

• Ammonia is seen as the most commercially viable hydrogen carrier, benefiting from established infrastructure and lower transportation costs compared to liquid hydrogen.

As we progress through the 2020s, the ambitious decarbonisation targets set by policymakers and industry leaders demand a shift from theoretical frameworks to tangible, cost-effective solutions. 

Hydrogen is widely anticipated to play a pivotal role in the transition away from fossil fuels, offering a clean energy alternative for sectors where direct electrification remains unfeasible—such as heavy industry (steel, cement, chemicals), long-haul transport (shipping, aviation, trucking), and power generation. 

A global hydrogen market is expected to develop along lines like the liquefied natural  gas (LNG) sector, characterised by long-term supply contracts and dedicated  infrastructure. Export-oriented hydrogen production projects are already in various  stages of development or feasibility assessment in regions such as the Middle East, Australia, Namibia, and Brazil. However, the logistics of hydrogen storage and  transport—particularly in its liquid form (LH₂)—pose significant challenges. Compared to LNG, LH₂ requires more complex and costly infrastructure, with added concerns regarding its volatility. While projects such as those spearheaded by ECOLOG are exploring LH₂ carrier and storage solutions, ammonia (NH₃) is increasingly regarded as  a viable and cost-effective hydrogen carrier, enabling large-scale international  hydrogen trade. This global push for hydrogen as a clean energy source has led to a key  debate: should hydrogen be transported directly or as an intermediary chemical carrier like ammonia? 

This article examines the evolving role of chemical tankers in the hydrogen economy, focusing on emerging trade routes driven by new green ammonia production hubs and shifting energy demand. It argues that green ammonia cracking represents the most commercially viable and scalable method for transporting hydrogen in bulk. Given the long timelines for commercialising new electrolysis infrastructure and LH₂ carriers—many of which are unlikely to achieve operational maturity before 2030—leveraging and decarbonising the ammonia value chain presents the most pragmatic approach to meeting hydrogen’s  role in a net-zero energy system. 

Chemical tankers and their trade 

Chemical tankers are specialised cargo ships designed for the transportation of liquid  chemicals in bulk. They form a subset of the broader category of tanker ships, which also includes crude oil tankers, product tankers and gas carriers. Pure anhydrous ammonia can be carried in chemical tankers under moderate pressure (8-10 bar), or in gas carriers below their boiling point (circa. -33 degrees Celsius). 

Key characteristics of chemical tankers include coated or stainless-steel tanks, segregated tanks and piping systems to allow transport of different chemicals, and specialised heating, cooling and pressurisation systems. These features of the tanker  prevent cross-contamination and corrosion, allowing for safety and cost-effective transportation of anything from edible oils to the most hazardous chemicals. 

As of 2025, the chemical tanker industry is navigating a tight supply outlook shaped by geopolitical tensions, evolving trade patterns, and fleet dynamics. Factors contributing  to this include an ageing fleet, limited newbuilds, and shifting trade patterns. A significant number of vessels are surpassing the 20-year age mark, prompting  considerations for retrofitting or scrapping. This scenario is expected to introduce  volatility in freight rates and asset values, but also potential adjustments to capitalise on developing markets. 

The Baltic Exchange has recently introduced the Baltic Chemical and Agricultural Oil Index (BCAA), providing insights into the key chemical tanker routes. Notable routes include: 

• EC11: Northwest Europe to US Gulf
• EC22: Middle East Gulf to West Coast India
• EC23: Middle East Gulf to China
• EC34: US Gulf to Far East
• EC35: US Gulf to Northwest Europe
• EC36: US Gulf to Brazil
• EC43: Singapore to China
• EC52: Korea to West Coast India
• EC57: Korea to Singapore
• PO45: Singapore Straits to Northwest Europe
• VG62: East Coast South America to West Coast India 

These routes facilitate the global movement of the most common demanded  chemicals, such as benzene, biofuels, caustic soda, and vegetable oils. The EC22, EC23, EC35 and EC36 are particularly important to the ammonia trade, as well as flows from Russia. 

Anhydrous ammonia, pure ammonia without water, is a significant commodity within  the chemical tanker sector, primarily due to its extensive use in fertiliser production and  various industrial applications. In 2022, the global trade value of anhydrous ammonia  reached $16.6 billion, ranking it as the 215th most traded product worldwide. The compound annual growth rate (CAGR) for the global anhydrous ammonia market is  expected to be 8.20% from 2024 to 2031. This growth rate signifies that there will be significant increases in the anhydrous ammonia trade, giving hydrogen fuel producers and terminal developers the chance to make use of an established and rapidly growing  intermediary chemical. The role of ammonia in the hydrogen chain needs to be explicitly addressed, particularly as industry growth rates do not account directly for  potential growth in green or blue ammonia (fully decarbonised ammonia production or conventional ammonia production with carbon storage.) 

Energy efficiency: carrying pure green hydrogen vs. green ammonia 

Option 1: Direct Hydrogen Transport (via Compression or Liquefaction) 

Total efficiency: ~25-45% (depending on transport method) 

Option 2: Hydrogen Transport via Green Ammonia 

Total efficiency: ~20-35% 

Though there are some additional energy losses in the Haber-Bosch and additional  cracking step at discharge terminal, the widely established trading and shipping assets  for anhydrous ammonia provides a strong economic argument for the ammonia  method, particularly as delivered hydrogen prices will depend heavily on the carrier  choice (chemical tanker, ammonia gas tanker, or LH2 carrier):

Current Market Considerations

Unlike hydrogen that needs to be extensively cooled, infrastructure and retrofitting for  pressurised bulk handling is well established, and anhydrous ammonia is stored as a liquid at just moderate pressure or at a more sustainable temperature of –33 degrees Celsius. Chemical tankers designed to carry anhydrous ammonia would have tanks that can withstand these conditions and are already equipped to handle liquids under pressure without extensive cryogenic needs. 

Given these factors, ammonia is currently viewed as the most commercially viable  hydrogen carrier for long-distance trade, particularly between exporting regions  (Australia, the Middle East, potentially Brazil and Namibia) and major demand centres  (Germany, ARA region, Japan). 

This trade-off makes ammonia more viable for long-distance shipping but potentially less efficient for direct energy use. 

Finally, it is worth taking stock of the existing landscape of ammonia development to see what future trade routes might look like. 

Ammonia projects and future trade routes 

Based on the current development of production and import terminals across the world, as well as ammonia fracking interest concentrated mainly in Europe, we can already trace  out preliminary expectations on trade routes within the green ammonia trade. Coming  full circle to the previously mentioned Baltic Chemical and Agricultural Oil Index (BCAA)  tracing key chemical trades, it seems the green ammonia/hydrogen trade will see the  addition of new key routes, namely: 

• Australia to Far East
• Middle East Gulf to Far East
• Middle East Gulf to Northwest Europe
• Brazil to Northwest Europe 

Indicative Trade Route Map

There are several green ammonia projects in development for completion by 2030s,  including:

Strategic outlook for commodity traders 

The ability to lock in contracts, both on supplier and customer side, will be key in bolstering the beginning of the hydrogen fuel industry, yet product and market optionality (between ammonia and H2 for example) often benefits commodity traders massively and leads to faster market development. This is also true as it has mostly been key commodity market actors (such as Fortescue, Gunvor, Mercuria, Yara etc.) and prominent shipowners who have added ammonia infrastructure and newbuild chemical tankers to the global orderbook and pipeline. Investing in ammonia transport and strategic hydrogen hubs could be lucrative, and financing solutions for ammonia trading will  likely be more readily available than for hydrogen projects due to established shipping and trading routes, leading to slightly lower capital expenditure and broader financing  options. 

In conclusion, cost-competitive liquid bulk transport is crucial to decarbonisation as a price differential of even just one dollar per tonne can significantly impact the economics of decarbonisation.

Therefore, in the rapidly evolving hydrogen economy, the pivotal role of chemical tankers, particularly in the transportation of green ammonia, emerges as a critical component in bridging the gap between production hubs and consumption markets. This necessity is  underscored by the comparative inefficiencies and logistical challenges associated  with alternative hydrogen carriers. 

Liquefied hydrogen (LH₂), though a direct form of hydrogen storage, presents significant  challenges. It requires approximately five times more energy for liquefaction compared to ammonia and suffers from higher boil-off losses of approximately 0.3-0.5% per day  during transit, making it less suitable for long-haul transportation. Compressed  hydrogen (GH₂), another form of hydrogen storage, necessitates high-pressure tanks capable of withstanding up to 700 bar of pressure, rendering it impractical for large scale or long-distance transport. Conversely, Liquid Organic Hydrogen Carriers (LOHCs) involve complex chemical processes to release hydrogen, often yielding lower  energy efficiencies compared to ammonia, which poses a barrier to their adoption. 

Ammonia, distinguished by its higher volumetric energy density, offers a more efficient  solution for bulk transportation of hydrogen. Unlike LH₂, which requires cryogenic conditions at -253°C, ammonia can be transported at -33°C or even stored under  moderate pressures at ambient temperatures, simplifying logistics and reducing costs. The global ammonia infrastructure, characterised by established ports, storage facilities, and shipping capabilities, significantly reduces the capital investment needed for new developments. This well-established network supports the rapid scaling of hydrogen distribution without the extensive capital outlays required for developing new infrastructure for other hydrogen carriers. 

Furthermore, the feasibility of 'cracking' ammonia back into hydrogen at the destination  adds a layer of versatility to its use. This catalytic process allows ammonia to be  converted back to hydrogen, facilitating its use in various applications, including fuel cells and industrial processes. Ammonia itself can serve as a direct fuel for power generation and industrial applications, offering a dual utility that enhances its attractiveness as a carrier. 

Economically, the retrofitting of existing chemical tankers to handle liquid ammonia  under moderate pressures emerges as a cost-effective and rapidly deployable solution compared to the development of new ammonia gas tankers. The high costs and limited  availability of new builds for gas transport amplify the economic advantages of  leveraging existing tanker fleets, which can be retrofitted at a fraction of the cost and  time required to commission new vessels. 

As such, chemical tanker owners are uniquely positioned to capitalise on the decarbonisation trend sweeping through the global energy and transportation sectors. As the shift towards green ammonia and other clean energy carriers accelerates, these operators could pivot their existing fleets to service the emerging needs of the hydrogen economy. This transition allows them to take advantage of new revenue streams associated with green energy transport with minimal modification and new build costs.

As the demand for cleaner energy solutions grows and international collaborations expand to meet global decarbonisation goals, the chemical tanker industry is poised to  play an increasingly central role in the global energy framework. This transition from traditional oil-based products to greener alternatives like ammonia not only aligns with environmental objectives but also positions the tanker industry at the forefront of a significant shift in global energy transport dynamics.

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