Government support for ammonia-powered shipping in Japan, Korea

More than $210 million to expand engine, fuel tank, and component manufacturing capabilities in Japan

Two Japanese government departments (the Ministry of Land, Infrastructure, Transport and Tourism, in cooperation with the Ministry of the Environment), will invest over ¥120 billion (about $770 million) in a series of sixteen projects to support the construction of “zero-emission ships” that use alternative fuels, including ammonia. Nine of these sixteen projects involve the manufacture of ammonia engines, fuel tanks and other components in Japan, comprising about $212 million total investment. These include:

• $43 million for Japan Marine United for the installation of new ammonia fuel supply R&D facility, plus installation of new ammonia/LNG fuel tank production facility
• $42 million for Oshima Shipbuilding for expansion of ammonia and LNG fuel tank production capacity
• $42 million for Japan Engine Corporation to increase its ammonia engine production capacity, plus an expansion to its fuel supply R&D facilities. Japan Engine Corporation completed successful testing for its ammonia-fueled marine engine in November 2024
• $39 million for Imabari Shipbuilding for the construction of new press for ammonia and LNG fuel tank production
• $22 million for Shin Kurushima Sanoyasu Shipbuilding for expansion of ammonia and LNG fuel tank production
• $13 million for Izumi Kogyo for increasing ammonia fuel tank production capacity
• $6.3 million for Daihatsu Diesel to install new testing systems for its ammonia-fueled engine, and for exhaust gas treatment, as well as expanding production facilities for fuel supply systems and the engines themselves
• $3.6 million for Nippon Nozzle Precision Machinery to construct manufacturing equipment for two engine components: fuel injection valves and fuel injection pumps
• And $1.2 million for Volcano Corporation for production of ammonia-fueled boilers, plus testing facilities for their use onboard ships

The “Study Group for Realizing Transformation in the Ship Industry,” which was established by the Ministry of Land, Infrastructure, Transport and Tourism in May 2023 and is made up of maritime-related personnel from industry, government and academia, sees the game-changing fuel switch in ships as an opportunity for Japan’s ship industry to make a breakthrough, and 　compiled a report in July 2024 with the goal of “ensuring the top share in orders for next-generation ships in 2030 for Japan’s maritime industry.”

Translated by Google, from the Ministry of Land, Infrastructure, Transport and Tourism’s official press release (Japanese language), 9 Jan 2025

Korea Export-Import Bank commits to support newbuild vessels

Meanwhile in South Korea, the country’s Export-Import Bank has promised more financial support for newbuild ammonia vessels (Korean language). In a visit to the Hyundai Mipo shipyards in Ulsan, bank President Yoon Hee-sung attended the naming ceremony of EXMAR’s new LPG dual-fuel ship, and affirmed the bank’s support for a series of ammonia dual-fuel newbuilds, which will be delivered in 2026-27. The Korea Export-Import Bank has provided a total of $170 million in financial support for the series of vessels (LPG and ammonia dual-fuel)

[We] will continue to promote the excellence of our shipbuilding industry to major overseas shipowners and provide strategic financial support to overseas customers who contribute to securing the competitiveness of domestic shipbuilders through eco-friendly and high value-added ship orders.

Korea Export-Import Bank President Yoon Hee-sung in his organisation’s official press release, 6 Jan 2025

The bank will increase its ship financing support plan to a total of $8.3 billion this year, including “refund guarantees” in case of shipyard failing to deliver a vessel on time.

The financial support is part of a larger government initiative: the K-Shipbuilding Super Gap Vision 2040. Korea’s Ministry of Trade, Industry and Energy launched the 2040 roadmap in July last year, and has proposed 10 flagship projects for developing the necessary technologies, including ammonia-fueled vessels. Approximately $1.4 billion will be invested in these projects over the next decade. MOTIE and Korea’s three major domestic shipyards will also collaborate on productivity improvement technologies for shipyards.