A recent webinar by the Global Maritime Forum focused on the topic of retrofitting as an opportunity for existing vessels to meet the latest standards and regulations, improve GHG emission performance by burning the next generation of zero carbon fuels, and still remain attractive as a business asset.
Key takeaways from webinar:
Retrofitting: design and fuel options
According to the webinar, there is a growing wish from the shipping industry to meet sustainability goals and emission reduction targets, and there is growing demand to do so from customers as demonstrated by the First Mover Coalition (FMC) and the Cargo Owners for Zero Emission Vessels (CoZEV) initiatives.
According to Amar Parikh, Retrofit Development Manager for Man Energy Solutions, currently available technologies can improve vessel efficiency and enable a reduction of the total cost of ownership. Adhering to new and adaptive regulations such as the International Maritime Organisation (IMO) Energy Efficiency Existing Ship Index (EEXI) not to mention impending future emission regulations can stimulate the deployment of current and future retrofitting options. A Transition Strategy study conducted by the University of Maritime Advisory Services (UMAS) and the Getting to Zero Coalition indicates that by 2046 the number of retrofits will reach around 35,000 vessels.
The Transition Strategy analysis found that vessels retrofitted to run on scalable zero emission fuels could comprise nearly half the global fleet by 2050. As pointed out by MAN Energy Solutions, Engines have different design specifications for each fuel, requiring different core technologies. For example, methanol and LPG engines can be retrofitted to run on a second fuel, or can be designed for exclusive methanol and LPG use.
The Transition Strategy analysis also found that vessels retrofitted to run on scalable zero emission fuels could comprise nearly half the global fleet by 2050. As pointed out by MAN Energy Solutions, Engines have different design specifications for each fuel, requiring different core technologies. For example, methanol and LPG engines can be retrofitted to run on a second fuel, or can be designed for exclusive methanol and LPG use.
Credit: Global Maritime Forum
Retrofitting: challenges
One challenge of retrofitting is that there is little experience across the value chain. This relatively low experience related to retrofit, as well as the limited physical capacity of yards will likely be barriers contributing to bottlenecks for retrofitting. Vessels in operation are business assets and therefore cannot be docked for too long at the time, which highlights the need for shift retrofitting processes.
There is a high cost for the first retrofit, a lot of resources and money are allocated to it and there is a need to incentivize first movers
said Amar Parikh. Naturally.
Considering that retrofit for a container vessel can cost more than USD 30 million, the payback must include different factors such as the opportunity cost of the yard stay while the vessel is out of operation, the operating patterns and fuels prices, as well as the actual cost of engine and vessel conversion.
Given that retrofitting a vessel will require the vessel to be out of the water for at least a few months, it is essential that appropriate planning and preparation occurs in advance of dry docking to ensure the vessel is operational again as soon as possible. Best practice guidance is that the retrofit should be planned at least 12-14 months in advance of dry docking. On top of this planning, there is potential for severe shortage of dry dock availability at yards.
It is likely that larger vessels will need to transition to zero-emission fuels sooner due to their operating profile. The first retrofits will likely be those with the highest demand pressures and higher margins, e.g. large cargo vessels and cruise ships. This means that the first decarbonization retrofits will start to take place within this decade, with retrofitting activity continuing into the 2030s and early 2040s for other vessel types.
Accelerating retrofitting via demonstration projects
During the webinar, Stena shared the lessons learned from the retrofitting process. To begin, there is a need for a detailed timeframe. Indeed, retrofitting is more complex than building a new vessel and time for regulatory development should also be considered. Additionally, in this process, there was uncertainty regarding the fuel rates and the approval of a new fuel to be used for shipping. Finally, one of the takeaways is about the workforce leading the retrofitting. Vessel crews and shipyard personnel need to be skilled, prepared and motivated, as retrofitting work is intense. Finally, the crew need to be trained to operate the retrofitted vessel.
