A severe shortfall in global shipyard capacity could jeopardise the timely conversion of existing ships to burn alternative fuels, leaving as many as 20,000 vessels still operating on fossil fuels in 2050
According to the eye-opening Engine Retrofit Report from Lloyd’s Register, retrofitting a significant number of the 9,000 and 12,900 large merchant vessels estimated to be part of the global fleet in 2030 will rapidly accelerate the maritime energy transition. But there are only a limited number of repair yards currently capable of performing such conversions.
LR technology director Claudene Sharp-Patel said, “Decarbonising the existing fleet is crucial for reducing the maritime industry’s greenhouse gas emissions. Without significant progress in this area, there could be as many as 20,000 commercial vessels relying on fossil fuels by 2050”.
Based on its assessment of the naval architecture, electrical engineering and fuel-handling skills required to support the conversions to alternative fuels, LR’s report identifies only 16 yards with a maximum capacity of around 300 vessel conversions per year in total. During the early to mid-2030s, average global shiprepair capacity will be woefully inadequate to handle potential fuel conversion retrofits, according to data shown in the report.
Under one scenario, LR forecasts 9,400 ships will still be trading in 2050 that are candidates for engine retrofits to burn methanol or ammonia. It anticipates 5,900 will be candidates for methanol and 1,600 for ammonia. The report makes certain fuel uptake assumptions based on type of vessel, vessel age (10 years) and trade route. Under this scenario more than 1,000 ships will need to be converted in 2031 to 2033.
“For example, bulk carriers of 100,000 dwt and bigger are assumed to adopt mainly ammonia, due to current indications that a substantial production of and market for ammonia will exist on some trades, including between Australia and China. Meanwhile, handysize chemical and product tankers are assumed to adopt mainly methanol due to potential synergies with their cargoes and the fact that their use of ports near heavily populated areas makes ammonia adoption more challenging,” noted the report.
The report assumes some 20% of vessels will opt for other fuels and potentially apply other technologies, including carbon capture. This scenario also envisions that the transition to building only zero-emissions vessels begins in 2027.
A second scenario modelled in the report paints a slightly different picture, with a slower uptake of retrofitting technology and 15-year-old vessels undergoing conversions. This results in tight shiprepair capacity from 2033-2037.
Under a third scenario, the move to zero-emissions newbuilding starts in 2030 rather than 2027, putting more strain on shiprepair capacity to handle the conversions of non-alternative fuel vessels.
“The result of the delay in zero-emissions newbuilding is that a further 3,300 retrofit-candidate vessels built for conventional fuels remain in service by 2050, taking the total potential market for engine retrofits to 12,270. Of these, around 7,300 could retrofit methanol-fuelled engines, while 2,500 could opt for ammonia” said the report.
One of the key challenges with retrofits identified in the report is system integration, with significant issues such as accommodation for larger fuel tanks, space for fuel preparation equipment and ensuring safety measures are in place, all providing obstacles to rapidly retrofitting the existing fossil fuel fleet.
And, the study shows the use of renewable methanol or ammonia would significantly increase fuel costs, in some cases more than doubling for vessels in all segments.
Two-stroke and four-stroke engine designers and OEMs are introducing engine retrofit kits, new engines and fuel supply and storage systems for methanol and ammonia, which have different energy densities, combustion characteristics and safety requirements than traditional marine fossil fuels.
The study also highlights the importance of human factor considerations, underlining how the critical aspect of impact on crew members can often be overlooked during retrofitting. Assessing ergonomics, roles and responsibilities, competency and training, procedures processes, and occupational health will play a crucial role in ensuring retrofitting is safe and effective for ship operators.
You can download the Engine Retrofit Report using this link.
Riviera Maritime Media’s Maritime Decarbonization Conference, Americas will be held 12-13 December 2023 in Houston, USA. Use this link for further information and to register your interest
© 2023 Riviera Maritime Media Ltd.