GMF: South Africa-Europe iron ore shipping could run on ammonia by 2029

New report identifies potential SA bunkering hub

Click to learn more. Ammonia fuel can feasibly be used on the South Africa to Europe iron ore shipping corridor by 2029, according to a new report. Source: Fig 2 from Assessing the feasibility of the South Africa-Europe iron ore green shipping corridor (GMF, Oct 2025).f

Ammonia-fueled iron ore carriers could feasibly be deployed on the South Africa-Europe iron ore trade route as soon as 2029 and scale toward full route decarbonisation by 2035, according to a new report led by the Global Maritime Forum. A consortium including local stakeholders Anglo American, CMB.TECH, Freeport Saldanha, VUKA Marine, and ENGIE has outlined a roadmap to ammonia fuel-based decarbonisation of the trade route, linking Saldanha Bay in the Western Cape to the Port of Rotterdam in the Netherlands.

Saldanha Bay is currently home to South Africa’s primary iron-ore export terminal, and is reportedly planning the development of ammonia production, alongside port upgrades to handle bunkering operations. Although in initial years the bulk carriers would need to bunker ammonia fuel in Rotterdam, Saldanha Bay has the capability to develop into an ammonia bunkering hub, fueling this and other trade routes. To unlock full decarbonisation benefits from ammonia fuel and ensure vessel operating costs are kept competitive, the report outlines a suite of supporting policies to implement, complimenting jurisdictional (FuelEU) and international (IMO net-zero) frameworks.

This phased approach gives shipowners and fuel producers a clear timeline to work toward, and we now need coordinated action from policymakers and industry to make this a reality by 2029. However, to help Saldanha Bay transition quickly, blending public and private funding can unlock investment in infrastructure and reduce the risks of early projects.

Shanon Neumann, Associate – Investment Facilitation at Freeport Saldanha, in the Global Maritime Forum’s official press release, 30 Oct 2025

Ammonia fuel availability in South Africa

The report identifies three production projects on the southwest African coast to meet fuel needs for the corridor: Boegoebaai (national energy company Sasol is leading development of the Boegoebaai green fuels project), Saldanha (proposed by PTX-SA), and Walvis Bay (a marine fuel production project in Namibia led by CMB.TECH). Together, the three production projects could meet the corridor’s annual fuel needs by 2035, including the “high-demand” scenario of 22 iron ore bulk carriers operating on the route.

Click to expand. Total cost of ownership of vessels, and the impacts of low and high benefit IMO policy support. Source: Fig 13 from Assessing the feasibility of the South Africa-Europe iron ore green shipping corridor (GMF, Oct 2025).

To assess total costs to shipowners, the report looks at the overall cost of using ammonia fuel, taking into account both the higher fuel costs, and the effect of the potential adoption of the IMO’s GHG reduction framework in 2026, particularly rewards for operating on zero and near-zero fuels. At the lowest policy benefit settings, ammonia fuel results in a 28% more expensive total ownership cost, but at the higher benefit settings, adoption of the IMO frameworks next year could result in 27% lower costs to a shipowner for running a Newcastlemax iron ore carrier on renewable ammonia fuel from South Africa to Europe. Similar analysis suggests that the already-in-force FuelEU shrinks the cost gap for ammonia fuel, but the total cost to the vessel owner is still 27% higher than using conventional marine fuel oil. The analysis underscores that “if designed thoughtfully and implemented in a timely manner, regulatory measures [from the IMO] could help narrow the total cost of ownership gap and strengthen the long-term business case for adopting green ammonia”. But, they are unlikely to fully close the cost gap without immediate action.

Filling the cost gap via implementation

To close the cost gap and ensure the success of the future corridor, GMF makes a series of local recommendations, which could easily be applied to any future project:

• Establish strategic partnerships and new commercial arrangements, including demand aggregation, third-part matchmaking and joint investments
• Advance a local, enabling regulatory landscape
• Mobilise funding and incentives for corridor infrastructure to close the cost gap

You can access the full report here. In 2023, GMF led a similar analysis of the Australia-East Asia iron ore corridor, concluding that ammonia-fueled vessels could be deployed on this key route by 2028.