Engine manufacturers are eying huge business with retrofits

Engine manufacturers are eyeing a huge slice of new business as owners recognize the possibilities of retrofits.

Maersk recently announcing that it will retrofit one of its ships to methanol dual-fuel has got others reassessing their assets. Maersk has selected German engine maker MAN Energy Solutions for the first engine conversion set to take place in the middle of 2024.

Detailed engineering has already started, and retrofitting the ship will also include, for instance, new fuel tanks, a fuel preparation room, and a fuel supply system.

MAN estimates that 2,800 vessels with MAN two- and four stroke engines are eligible for conversion today and could save more than 97m tons of carbon dioxide (CO2) emissions annually when run on green fuels.

Singapore-based owner Berge Bulk recently teamed up with class society ABS to explore the possibility of retrofitting the 300 m-long heavy fuel oil-powered newcastlemax bulker Berge Mauna Kea.

The 210,000 dwt ship is currently under construction at the Nihon Shipyard in Japan, with delivery expected in mid-2024. The joint six-month study will see the duo collaborate on a broad range of subjects from the availability of methanol fuel and practicalities of bunkering to the review of technical and economic aspects of the conversion.

The cost of retrofitting, including the fuel storage and fuel supply system, ranges between $5m and $15m depending on the type of fuel and, as a rule of thumb, this should not exceed 25% of the newbuild cost of a ship to be economically viable, according to advice from DNV.

Pouring some cold water on the potential market for retrofits, DNV’s business development manager Christos Chryssakis has estimated that less than 10% of the existing global merchant fleet are theoretic candidates for retrofitting.

Other companies already pursuing engine retrofits include Norwegian shipowner Eidesvik and Japanese giant Nippon Yusen Kaisha.

Analysis from Wärtsilä shows that without modification, more than 80% of the global merchant fleet could fall into the lowest Carbon Intensity Indicator (CII) rating by 2030.