Korea and China's shipbuilding industries are locked in fierce competition in the segment of ships that transport or use ammonia, a carbon-free energy source, as propulsion fuel. The front line of the high value-added shipbuilding race between the two countries is expanding from liquefied natural gas (LNG) to ammonia.
Korean and Chinese shipbuilders have gone head-to-head for the "world's first" and "world's largest" titles in the markets for very large ammonia carriers (VLAC), which transport liquefied ammonia, and ammonia dual-fuel (DF) vessels, which use ammonia as propulsion fuel.
◇ Korea and China neck and neck in VLAC orders that carry ammonia
According to the shipbuilding industry on the 17th, Korean and Chinese shipbuilders split roughly half and half of the more than 20 VLACs ordered in the first half of this year.
A VLAC is a large gas carrier with a liquefied ammonia cargo tank capacity of 80,000–90,000 ㎥. The boundary between VLACs and very large gas carriers (VLGC), which transport liquefied gases such as liquefied petroleum gas (LPG), is not clear. Both VLGCs and VLACs can carry LPG and ammonia. It is common to classify ships designed primarily for transporting ammonia, based on VLGCs, as VLACs.
VLACs that transport liquefied ammonia are considered a ship type with a high degree of construction difficulty due to the strong corrosiveness and high density of ammonia. Because it is highly toxic, leak prevention management is also critical. Design of cargo tanks, hull structure, safety systems, and gas cargo handling is more demanding than for general gas carriers, making them technology-intensive vessels. For this reason, they are regarded as a high value-added ship type with high ship prices and profitability.
Ammonia carriers are gradually getting larger. Ammonia has long been transported by sea as a feedstock for fertilizers and chemical products. It has mainly been carried by medium-sized gas carriers in the LPG family or by VLGCs. Recently, as ammonia's potential use as a marine fuel and as a hydrogen carrier (converting hydrogen into ammonia for transport) has grown, demand is increasing for ultra-large VLACs designed specifically for long-distance ammonia transport in anticipation of expanded trade volumes.
In July, HD Hyundai Samho under HD Hyundai won an order for three 90,000 ㎥ VLACs from Synergy Shipping, a Greece-Türkiye shipping company. The total contract is 545.6 billion won, with a per-ship price of 181.8 billion won ($120.9 million). Delivery is scheduled by May 2030.
After ordering six VLACs worth a total of 1.0782 trillion won from HD Hyundai Samho in May, Synergy Shipping placed an additional order for three ships two months later.
Shipbuilders affiliated with HD Hyundai are currently building the most VLACs in Korea. Earlier in March, HD Hyundai Samho won an order for two VLACs worth a total of 340.2 billion won from Belgian shipowner Transpetrol. As of the end of July, HD Hyundai Samho had an order backlog of 22 VLACs.
HD Hyundai Heavy Industries is currently building three 88,000 ㎥ VLACs ordered in 2024 by Greek shipowner Atlas Maritime. Once construction is completed next year, Singapore-based global commodity trading company Trafigura will charter the ships.
Hanwha Ocean won an order in April for three VLACs worth a total of 507.4 billion won from London-based Zodiac Maritime. Zodiac Maritime also set an option to order two additional VLACs. Excluding the two option ships, Hanwha Ocean accumulated orders for 10 VLACs by April.
In China, Jiangnan Shipyard under the state-owned China State Shipbuilding Corp. (CSSC) and Hengli Heavy Industry under the privately held petrochemical corporations Hengli Group are leading in VLAC construction.
In June, Jiangnan Shipyard delivered a 93,000 ㎥ VLAC to Singaporean shipowner EPS. The design is a modified version of its self-designed 93,000 ㎥ VLGC (very large gas carrier).
Jiangnan Shipyard is promoting this vessel as the "world's largest" VLAC. Its delivery was about a month earlier than the 93,000 ㎥ VLAC that HD Hyundai Samho delivered to Danish shipping company Maersk last month.
This vessel is part of the VLACs first ordered by China's shipbuilding industry in May 2023. At that time, EPS ordered construction of six VLACs from Jiangnan Shipyard. The shipbuilding industry noted then that China had begun extending its influence beyond bulk carriers and container ships—generic ship types—to the high-difficulty, high value-added gas carrier segment that Korean shipyards had long led.
In January this year, Jiangnan Shipyard won additional orders from EPS for two 90,000 ㎥ VLACs. It also secured orders for two 90,000 ㎥ VLACs each from Tianjin Southwest Maritime in China and Greek carrier Thenamaris, winning six VLACs in the first half.
Hengli Heavy Industry won orders in February and April this year for a total of four 93,000 ㎥ VLACs from Dubai-based Emirates Maritime and others. In July, Hengli Heavy Industry also won contracts from three other shipowners to build six VLACs. Four of them are 93,000 ㎥ class, and the other two are 88,000 ㎥ class.
In June, Hengli Heavy Industry launched a 93,000 ㎥ VLAC built on a slipway (an inclined construction facility), not in a dry dock. Hengli Heavy Industry said it was "the world's first case of launching an ultra-large VLAC directly into the water after building it on a slipway rather than in a dry dock." The company said that by breaking with convention and building on a slipway, it demonstrated the technological capability to construct large gas carriers without a dock.
◇ Ammonia gains spotlight as an eco-friendly marine fuel
The competition is also intense between Korea and China in the field of ammonia dual-fuel propulsion vessels. Ammonia dual-fuel propulsion ships use both conventional marine fuel and ammonia as propulsion fuel. Ammonia is drawing attention as an eco-friendly fuel because it does not emit carbon dioxide during combustion.
From May to July, HD Hyundai Heavy Industries delivered two 46,000 ㎥ medium-sized gas carriers equipped with ammonia dual-fuel propulsion engines to their owners. They are part of four ships ordered by Belgian carrier Exmar in 2023 and 2024. HD Hyundai Heavy Industries said it "built the world's first ammonia-fueled vessel."
HD Hyundai Heavy Industries has accumulated orders for eight ammonia dual-fuel propulsion vessels from Exmar, Trafigura and others.
According to the 2050 carbon neutrality roadmap released by the International Energy Agency (IEA), the share of ammonia fuel in the shipping industry is expected to rise from 8% in 2030 to 46% in 2050.