Does scale make ammonia fuel affordable?
Yes, scale dramatically reduces costs. The largest techno-economic analysis among these papers [2] compared two ammonia cracking plants: a small one processing 4,000 tons/year and a large one processing 400,000 tons/year. At the small scale, the minimum hydrogen selling price to achieve a 20% internal rate of return was $14.3 per kg of H2. At the large scale, that price dropped to $3.7 per kg—a 74% reduction. This shows that ammonia-based fuel systems are not inherently expensive; they become competitive when deployed at industrial scale.
The same study [2] found that the cost of ammonia itself (whether grey, blue, or green) is the primary driver of overall costs, not the capital equipment. This means that as renewable ammonia production scales up and prices fall, the fuel cost advantage will grow.
Is ammonia fuel cost-competitive for shipping right now?
No, not yet. A detailed life-cycle cost analysis of an ammonia-fueled carrier [1] found that using ammonia as fuel roughly doubled the unit transportation cost compared to conventional very low sulfur fuel oil (VLSFO) or marine diesel oil (MDO). For a route from Australia to South Korea, the cost was $42.9 per ton of ammonia when using ammonia fuel, versus $23.6 per ton with VLSFO/MDO. The fuel cost itself was the largest portion of total costs.
However, a more recent multi-criteria assessment [4] found that ammonia dual-fuel engines are currently the most cost-effective retrofit option for deep-sea container ships, with a marginal abatement cost of $254 per ton of CO2 avoided. This means that while ammonia fuel is more expensive than conventional fuel, it is the cheapest way to significantly cut emissions among the alternatives studied (e-ammonia, e-methanol, e-liquid hydrogen). The study also showed that all retrofit configurations comply with IMO greenhouse gas targets through 2040, but only hydrogen-based systems approach the 2050 net-zero trajectory.
Could making ammonia locally make it cheaper?
Yes, decentralized production could be a game-changer. A global analysis [5] found that producing low-carbon ammonia at the farm scale using solar agrivoltaics or grid electricity could achieve cost-competitiveness for up to 96% of global ammonia demand by 2030. This is because decentralized production avoids the long-distance transport costs and supply chain disruptions that plague the current centralized industry. The study compared projected costs of decentralized production with historical market prices from centralized production and found that when transport costs and supply disruptions are factored in, decentralized systems become competitive.
This is particularly important for regions facing food insecurity, where fertilizer costs are volatile. The study [5] specifically highlights that small modular technologies like electric Haber–Bosch or electrocatalytic reduction could revolutionize the fertilizer industry by making production local and resilient.
About These Sources
This answer is built on 5 peer-reviewed studies — published from 2024 to 2026, 5 from 2024 or later, 3 in Q1 journals, collectively cited 91 times — selected as the most relevant from 11 studies that passed quality screening, drawn from 63 papers retrieved from a database of over 500 million.
Sources used in this answer
Technical–Economic Analysis for Ammonia Ocean Transportation Using an Ammonia-Fueled Carrier
Ammonia fuel on an ammonia carrier roughly doubles transportation cost compared to VLSFO/MDO ($42.9 vs $23.6 per ton-NH3 from Australia to South Korea), with fuel cost being the largest expense.
Technoeconomic Evaluation of Ammonia Cracking for Hydrogen Production: A Question of Colors and Scale
Ammonia cracking for hydrogen production shows a 74% cost reduction when scaling from 4,000 to 400,000 tons/year ($14.3 to $3.7 per kg H2), with ammonia cost as the primary driver.
Flame stabilization in a non-premixed ammonia-hydrogen-air micro-combustor with a 1 mm channel
Ammonia-hydrogen mixtures can achieve 99.9% combustion efficiency in micro-combustors at an equivalence ratio of 0.8, demonstrating technical viability for small-scale power.
Comparative multi-criteria assessment of electro-fuel-based marine power systems for container ships
Ammonia dual-fuel engines are the most cost-effective retrofit for container ships ($254/tCO2 abatement cost), but only hydrogen systems approach 2050 net-zero targets.
Cost-competitive decentralized ammonia fertilizer production can increase food security
Decentralized ammonia production could be cost-competitive for up to 96% of global demand by 2030 when transport costs and supply disruptions are considered.