Nor-Shipping 2025 Thought Leader interview – Enger, CEO, Höegh Autoliners

'We have to move on what's scalable right now. 'There's no time to lose.'

Höegh Autoliners CEO Andreas Enger explains the company's rationale behind choosing ammonia to power the last four of its new PCTCs. His key message: 'Endless talk about the complexities around alternative fuels is a dangerous distraction. We have to embark on the most viable route now to have any hope of meeting net zero by 2050.'

There continues to be a lot of talk about how uncertain and difficult things are with regard to alternative fuels. We have full respect for shipowners who have customers, operating patterns and asset positions that make them want to postpone big decisions. However, maintaining the status quo isn't a viable strategy. The IMO has set an ambitious 2050 decarbonization target, and to meet it we need immediate action. Transitioning the entire shipping industry to zero-carbon fuels is indeed complicated, but getting started definitely isn't. Sitting on the fence only pushes back our ability to meet the 2050 target. There's no time to lose.

Renewal focused our minds

In 2020, we urgently needed to renew our fleet with assets with a 30-year expected lifespan. Dual fuel was essential to maximize flexibility. We opted for LNG for the 2024/2025 deliveries, as it's the only current option. But they are designed to be convertible to ammonia and methanol (they already use marine gasoil (MGO), biofuel and bio-LNG in their current dual-fuel LNG configuration), ensuring we can adapt to these fuels as well.

The four vessels for delivery in 2027 will be fully dual-fuel ammonia, with expanded very low sulphur fuel oil (VLSFO) capacity. Ammonia emerged as the best choice based on our operating patterns, customer base and asset position. To ensure readiness, all 12 vessels are equipped with ammonia-capable fuel tanks (so avoiding the most expensive conversion item), requiring only the fuel system to be converted on existing vessels, potentially with additional tank capacity.

We expect the adoption of zero-carbon fuels in shipping to be gradual. Initially, we will offer zero-carbon services in select corridors to premium customers with high-value cargo and a strong brand strategy to reduce their carbon footprint. We aren't planning an ammonia 'big bang' in 2027, just enabling customers to choose zero-carbon if it suits.

Carbon pricing is essential

Industry consensus suggests that the IMO will adopt some kind of carbon pricing mechanism in 2025, and this together with appropriate funding strategies to spur the uptake of new fuels should accelerate the speed of the transition. We are preparing for both a rapid and gradual shift, ensuring flexibility in our investments. We chose ammonia due to its scalability and favourable long-term pricing versus alternatives like methanol. Demand for ammonia in the power generation sector further supports its scalability and potential to secure sustainable fuel prices for shipping.

Collaboration with leading energy analysts, fuel suppliers and partners like Yara and MAN has reinforced our confidence in ammonia's viability. Ammonia can be scaled through both blue (using natural gas and carbon capture) and green production routes, making it the most promising zero-carbon fuel. It is particularly suitable for long ocean legs, which are the primary sources of shipping's carbon emissions. We estimate that where we deploy ammonia will reduce our emissions by 80%.

With regard to strategic bunkering locations, currently projects are in place at key ports such as Singapore, the Rotterdam-Amsterdam-Antwerp cluster, with availability likely also in the US Gulf, Australia (as miners look to decarbonise their logistics legs) and even southern Africa. These locations will support us in achieving almost full ammonia operations from 2027.

Demand signals will stimulate supply

We view arguments against adopting new fuels due to infrastructure challenges as distractions. Scaling in any market starts with creating demand, and we are taking concrete action to do so. Energy analysts argue that with appropriate regulations, ammonia can become the most cost-effective and scalable zero-carbon fuel, especially when produced initially through the blue route.

Batteries were obviously out of the question, while hydrogen isn't viable due to storage constraints. Ammonia remains the best available option for storing hydrogen. Our investment is in optionality, and our goal for net zero is 2040, in line with many of our customers. While regulatory shifts will influence the pace of the transition from fossil fuels, we are well prepared to adapt.

Implementing a global carbon pricing mechanism is essential. The IMO's expected provisions, including carbon pricing and fuel standards, are critical to accelerate decarbonization. A global carbon pricing mechanism to replace the EU Emissions Trading System (ETS) would significantly boost these efforts. Fuel standards mandating zero-carbon fuel uptake are also vital. Indeed, we believe the Fuel EU Maritime regulation is a much stronger trigger after 2030 than the EU ETS because the penalties for not delivering your share of zero carbon fuel is going to be quite high.

Reliable crews are essential

Fortunately, LNG and ammonia fit very well with our crewing model. We have run our crewing service internally for decades, recruiting and promoting cadets all the way to captain if they perform. We would've been less comfortable if we didn't have capable seafarers we already know well to train in safe handling of LNG and ammonia. In addition to handpicked crews, we will put dedicated safety officers onboard each ammonia vessel to ensure there are absolutely no procedural deviations in handling the molecules.

No end of strong partners

One fantastic aspect of this industry are the abundant opportunities for collaboration. Access to so many capable players enables a relatively small company like ours to achieve significant milestones. For ammonia, we have a robust ecosystem of partners across the entire value chain, including Rystad Energy, MAN, China Merchants Group, Kongsberg Maritime, Yara, Fortescue, Sumitomo, DNV and the Norwegian Maritime Directorate (all our vessels fly the Norwegian flag and have DNV class), Gard, the Norwegian Hull Club and many others. We also have excellent relationships with our OEM customer base, who are the ultimate target of all this.

A special mention goes to Deltamarin, who we've partnered for 20 years. Their Aurora-class design has transformed the entire PCTC world. We wanted it so much that we went public to raise the capital for our renewal.

Nor-Shipping – 'a fantastic platform'

In the midst of one of shipping's most important transitions in history, we have a clear agenda. Leadership is about collaborating with strong partners to identify challenges and find solutions, not describing all the problems in increasingly elaborate ways. We believe we have a valuable contribution to make and there's no better arena to talk about it that than Nor-Shipping.

As a lead partner in the Nor-Shipping Blue Talks, we hope to be engaged in all sorts of productive discussions that align with our tagline #sailingforsustainability. For a Norway-based owner, it's a singular event that draws maritime colleagues from all corners of the globe – to chew over issues, touch base with partners and socialise. It's a week that we all tremendously enjoy and together with Nor Shipping, The Norwegian Sailing League and some key partners we will be opening the week with a sailing cup.