January 25, 2024

Contracts Signed for Construction ofAmmonia-Fueled Ammonia Gas Carrier

Japanese technology pioneering the future — Aiming for vessel completionby November 2026

Nippon Yusen Kabushiki Kaisha (NYK)Japan Engine Corporation
IHI Power Systems Co., Ltd.
Nihon Shipyard Co., Ltd.
Nippon Kaiji Kyokai (ClassNK)
In December 2023, Nippon Yusen Kabushiki Kaisha (NYK), Japan Engine Corporation, IHI Power
Systems Co., and Nihon Shipyard Co., Ltd. signed a series of contracts to construct the world's firstammonia-fueled medium gas carrier (AFMGC) equipped with Japan-made engines. The completionof the vessel will be a significant step toward the realization of decarbonization in the maritime
sector. In October 2021, the four companies were selected by Japan’s New Energy and Industrial
Technology Development Organization (NEDO) for its Green Innovation Fund Project,* andtogether with Nippon Kaiji Kyokai (ClassNK), a partner organization, the five parties (hereafterreferred to as “the Consortium”) have been working on “a demonstration project for thecommercialization of vessels equipped with a domestically produced ammonia-fueled engine” (the“Project”). Under the slogan “Changing the future of the sea and the future with Japanesetechnology,” Japan’s maritime industry is now in full swing to lead the world with the AFMGC
toward its completion in November 2026.
1. Background and Goals
i. Contributing to the Achievement of Net-Zero Emissions in International Shipping
To achieve net-zero emissions in international shipping, switching from conventional fossil fuels tooptimal next-generation fuels is essential. Since ammonia does not emit carbon dioxide (CO₂)

during combustion, it is expected to be a next-generation fuel that contributes to preventing global
warming. Through the development and construction of the AFMGC, the Consortium will contributeto the practical application of ammonia-fueled ships.
ii. Building an Ammonia Value Chain
Ammonia, which has traditionally been chiefly used for fertilizer and other chemical raw material
applications, is expected to be used for co-firing in thermal power plants and as a hydrogen carrier,** and demand for ammonia is expected to grow rapidly in Japan and overseas. At the same time,
demand for ammonia production and marine transportation will also increase, and an ammonia
value chain is expected to be established sequentially. Based on the belief that establishing acleaner, less environmentally burdensome ammonia value chain is indispensable for realizing adecarbonized society, the Consortium will work to complete and popularize the AFMGC and otherammonia-fueled ammonia carriers.
iii. Strengthening Japan’s Maritime Industry
Surrounded by the sea, Japan depends on maritime transportation for more than 99% of its imports
and exports of resources and food (by weight). The maritime industry is essential to Japan’seconomic security. The maritime industry includes shipping companies that operate ships,
shipbuilders that supply transport vessels, and marine equipment manufacturers, all of which areworking to maintain and strengthen their international competitiveness. The consortium sees fuelconversion to achieve zero emissions as an opportunity and aims to use the technologicalcapabilities of the Japanese maritime cluster to supply ships with high environmental performanceand safety ahead of other countries.
iv. International Rulemaking for Marine Use of Ammonia
International rules for ships using ammonia as fuel are not yet in place, and the International
Maritime Organization (IMO) is currently discussing the issue. This Project is one of the first to
develop ammonia-fueled ships, and the knowledge gained from the construction and operation ofAFMGCs will be essential to the progress of discussions at the IMO. The Consortium aims to work
closely with ClassNK and Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
to contribute actively to international rulemaking.
2. Vessel Overview
Type
Planned delivery
date
Shipbuilder
Engines

40,000 m³ type ammonia fuel ammonia carrier
November 2026
Japan Marine United Corporation, Ariake Shipyard
1. Main engine: ammonia fuel dual-fuel two-stroke engine produced byJapan Engine Corporation2. Auxiliary engine: ammonia fuel dual-fuel four-stroke engine produced byIHI Power Systems
The main engine is an engine that turns a propeller to propel the ship.
An auxiliary engine is an engine that drives the generator that provides theship's electricity.
Major technicaldevelopment
elements

1. Development of ammonia fuel dual-fuel engine
Ammonia fuel dual-fuel engines must co-fire ammonia with fuel oil aspilot fuel. On the other hand, a high ammonia co-firing ratio is required toachieve a high GHG reduction rate. The consortium aims to achieve thefollowing co-firing rates:◼ Main engine: an ammonia fuel mixed combustion rate up to 95%◼ Auxiliary engine: an ammonia fuel mixed combustion rate of 80% ormore◼ Entire ship: GHG reduction rate of 80% or more
2. Development of ammonia-fueled carrier- As a hull form optimized for ammonia transport, the design wasdeveloped to allow ammonia loading at total capacity.
- Since it is essential to establish a hull form and safety system that
protects the crew from toxicity, the consortium realized a design that
overcomes the biggest challenge of ammonia marine fuel utilization:
toxicity.

Vessel image

3. Challenges and Progress
i. Main Challenges in Designing and Developing Ammonia-Fueled Vessels
Flame retardancy of ammonia
Treatment of nitrous oxide (N2O), agreenhouse gas
Ammonia toxicity

Because ammonia is a flame retardant, developing
advanced technologies for stable combustion inengines is necessary.
Nitrous oxide (N2O), which has a greenhouse effect ofapproximately 265 times that of CO2, may begenerated during ammonia combustion. Technology isneeded to reduce and treat nitrous oxide emissions.
Because ammonia is toxic, the vessel must be
designed to prevent leakage from the piping andtanks. Even in the event of leakage, measures must
be taken to protect the safety of the ship's crew.
ii. Past Progress and Accomplishments
The four companies designed a prototype vessel that overcame these challenges, and the prototype
vessel obtained an Approval in Principle (AiP) in September 2022 after a safety verification processthat included confirmation of the safety concept and risk assessment by ClassNK. The acquisition ofAiP is in anticipation of the approval of an alternative design. After further research anddevelopment, the consortium determined that the prototype ship had reached a level sufficient forsocial implementation, particularly in safety and environmental friendliness, and decided to build
the ship.
iii. Safety
To overcome toxicity, the biggest challenge for marine fuels, the consortium conducted a risk
assessment review by ClassNK and a risk assessment and safety measures proposal from the user's
point of view led by NYK's engineers. The consortium reflected safety measures based on these risk
assessments in the ship's specifications to improve the ship's safety further. Based on the findings
from this Project, ClassNK published safety guidelines for ammonia-fueled ships. The consortium
proposed the draft safety requirements, a world-leading initiative, for future collaboration withother companies to the IMO through Japan’s Ministry of Land, Infrastructure, Transport andTourism.
iv. Environmentality
In May 2023, IHI Power Systems achieved the world’s first stable combustion of fuel ammonia at an
80% co-firing rate with fuel oil in a 4-stroke engine that is planned to be used as an auxiliary engine
for an AFMGC. This experiment confirmed that emissions of nitrous oxide (N2O) and unburnedammonia from the engine were virtually zero and that there was no ammonia leakage during
operation and after shutdown. In the same month, Japan Engine Corporation began mixed firing
operations on a large, low-speed, two-stroke engine to optimize engine performance and verify
safety. Based on the data obtained from these demonstrations, the consortium has determined that
it is generally on track to achieve sufficient environmental performance by the engines. The
consortium will continue further research and development with the ultimate target of achieving
80% or more GHG reductions for the entire fleet.
4. Future Schedule
Toward the completion of the vessel in November 2026, the consortium will manufacture the mainand auxiliary engines, begin detailed studies for the vessel's construction, and prepare an operation
manual for actual operation. After the ship is completed, the consortium will continue to operate thevessel for demonstration purposes to confirm the vessel's performance, including environmental

friendliness and the practicality of the operation manual, and to provide user feedback to
shipbuilders and marine equipment manufacturers for further improvements. We will strive tobuild a development cycle as a "first mover" in developing ammonia-fueled vessels.
5. Company Overviews and Contacts
NameOverview
Headquarters: Tokyo
Nippon Yusen
Representative: Takaya Soga, President
Kabushiki Kaisha
Website: https://www.nyk.com/english/(NYK)

Japan EngineCorporation

Headquarters: Akashi City, Hyogo Prefecture,Japan
President: Ken Kawashima
Website: https://www.j-eng.co.jp/en/index.html

IHI Power Systems Co.,Ltd.

Headquarters: Tokyo
President: Takashi Murasumi
Website:https://www.ihi.co.jp/ips/english/index.html

Nihon Shipyard Co.,Ltd.

Head office: Tokyo
President: Yoshinori Maeta
Website: https://www.nsyc.co.jp/en/

Nippon Kaiji Kyokai(ClassNK)

Head office: Tokyo
President & CEO: Hiroaki Sakashita
Website: https://www.classnk.com/

Contacts
Corporate
Communication Group,Media Relations Team
email:NYKJP.ML.MEDIA@nyk
group.com
General Affairs & Public
Relations Section
Telephone: +81-78-9490800; email: pr_info@jeng.co.jp
IHI Administration
Division
Telephone: +81-3-43661203; email: ipswebmaster1@ihi-g.com
Human Resources &General Affairs Group
Telephone: +81-45-2128200; email:info@nsyc.co.jp
Public Relations TeamTelephone: +81-3-52262047; email:eod@classnk.or.jp* Green Innovation Fund ProjectA 2 trillion-yen fund created in NEDO to significantly accelerate current efforts such as structuraltransformation of the energy and industrial sector and innovation through bold investment toward
carbon neutrality by 2050. The fund provides continuous support from R&D and demonstration tosocial implementation for up to 10 years for companies that share ambitious and concrete goals withthe public and private sectors and tackle them as management issues. NEDO mainly provides
support in 14 priority areas for which action plans are being formulated in the green growthstrategy.
** Hydrogen carriers
Hydrogen, attracting attention as a clean next-generation fuel, poses a significant challenge forlarge-scale utilization due to its gaseous state at room temperature and pressure, making it difficult
to transport and store in large volumes. To overcome this issue, substances converted to a moremanageable state, such as compressed and liquefied hydrogen, and substances containing hydrogenthat can be efficiently transported, like methylcyclohexane and ammonia, are referred to ashydrogen carriers. Ammonia is expected to be utilized directly and as a hydrogen carrier. This isbecause it already has an established supply chain for fertilizer and other chemical raw material
applications, and it boasts an approximate hydrogen content of 18% and a hydrogen density pervolume that is 1.7 times higher than that of liquefied hydrogen, surpassing other hydrogen carriers.
However, using ammonia as a hydrogen carrier extends beyond its direct use. The establishment oflarge-scale decomposition (cracking) technology is required to extract hydrogen from ammonia.