Japanese trading house Itochu has penned an agreement with South Korean petrochemical firm Lotte Chemical to collaborate on ammonia fuel businesses for shipping and other industries such as the power sector.
Itochu said the plan is for the two companies to trade ammonia as fuel, to study the demand and use of ammonia infrastructure targeting the Japanese and Korean markets, and also invest in clean ammonia production facilities.
The government of Japan forecasts domestic ammonia demand of 3m tons in 2030 and 30m tons in 2050 and the country, as well as South Korea, is expected to have a significant presence as major importers of decarbonised fuels, Itochu stated, adding that it aims to secure competitive decarbonised fuel through joint procurement and optimisation of logistics under a memorandum of understanding signed with Lotte Chemical.
Reportedly, talks about infrastructure include loading and unloading facilities at main ports in South Korea, which are to be newly built for ammonia supply chains.
Itochu has been heavily involved in the development of the Japanese ammonia supply chain, including ammonia-powered deepsea ships. Last year, the company, in partnership with shipping major Kawasaki Kisen Kaisha (K Line), NS United Kauin Kaisha, shipbuilder Nihon Shipyard, and Mitsui E&S Machinery, secured significant government funding to deliver such ships to the market by as early as 2028.
The company also teamed up with chemicals firm Ube Industries and shipping firm Uyeno Transtech to set up a joint venture for supplying ammonia as a marine fuel and the development of a domestic supply chain. Last May, it also joined a development study with Vopak, Pavilion Energy, Mitsui OSK Lines (MOL) and Total Marine Fuels, which aims to develop an ammonia bunker supply chain in Singapore.