Ocean carrier HMM has signed a memorandum of understanding with five Korean partners to explore the establishment of a comprehensive green ammonia supply chain.
The organizations — HMM, LOTTE Fine Chemical, Lotte Global Logistics, POSCO, Korean Register (KR), and Korea Shipbuilding & Offshore Engineering (KSOE) — pledged to work together to form an end-to-end supply chain, from production to storage to transportation of green ammonia.
HMM said in an announcement this week that KSOE plans to develop an ammonia-powered ship that will be certified by KR. HMM and Lotte Global Logistics will test and operate the vessel. LOTTE Fine Chemical will transport POSCO-produced green ammonia and perform a bunkering operation.
HMM said back in 2019 that it aimed to reach carbon neutrality for its entire fleet by 2050. As part of its environmental initiative, the South Korean shipping line has been seeking multiple sustainable energy sources, including biofuels, LNG, hydrogen and green ammonia.
“We simply can’t decide and select one single carbon-neutral fuel at this moment, considering commercial viability, availability and scalability,” the HMM announcement said. “HMM will spearhead an effort to promote the use of a range of alternative fuels in cooperation with top-rated industrial players with experience and expertise.”
HMM likely has the cash to explore alternative fuels. It recorded its highest operating profit ever in the first quarter of 2021 — $915 million, a huge turnaround from the $2 million hole recorded in Q1 2020. Net profit grew to $138 million from a $59 million deficit in the first quarter last year.
Consolidated Q1 revenue totaled $2.17 billion, an 85% jump year-over-year.
HMM also has been aggressively growing its fleet. Last month it deployed two of eight new container ships, each able to carry 16,000 twenty-foot equivalent units (TEUs). The remaining six are expected to be delivered by June.
All eight container ships will be fitted with open-loop scrubber systems embedded with hybrid-ready technology. Selective catalytic-reduction technology is being applied to reduce nitrogen oxide emissions by 80% or more compared to the industry average, according to HMM.
Last year HMM launched 12 of the world’s largest 24,000-TEU container ships.