Retrofitting existing vessels to run on LNG could provide shipowners with the quickest financial payback among alternative-fuel conversion options, according to a new report from marine engine designer WinGD.
As reported by Ship & Bunker, WinGD’s latest Fuel Economics Report examined a hypothetical 16,000-TEU container ship retrofitted in 2030 to operate on LNG, methanol, or ammonia using the company’s dual-fuel engine technology. According to the report, all three alternative fuel pathways outperformed continued use of VLSFO over the vessel’s operating lifetime, based on the assumptions used in the study.
LNG Leads on Payback, But Not on Emissions
WinGD said in an emailed statement that “LNG delivers the strongest and earliest financial return, while ammonia and bio-methanol deliver substantially deeper emissions reductions but require longer payback periods.” The report found that switching from LNG to low-GHG-LNG carried an estimated payback period of six years, according to Ship & Bunker.
However, the study also found that ammonia and bio-methanol, despite requiring longer payback timelines, deliver greater emissions savings than the LNG pathway.
Subsidy Levels Needed for Faster Returns
According to the report, achieving a five-year payback across the different fuel pathways studied would require subsidies ranging from $126 to $330 per tonne of CO2 equivalent. WinGD noted that this indicates a reward mechanism for zero or near-zero emissions fuels under the IMO’s Net Zero Framework would need to be set at a similar level to the $100-380 remedial units already under consideration for excess emissions.
Carmelo Cartalemi, WinGD’s head of strategic marketing, was quoted by Ship & Bunker as saying that retrofit technology itself is increasingly not the limiting factor. “The commercial outcome is determined far more by fuel price, fuel GHG intensity and the regulatory signal,” Cartalemi said.
Does This Matter to You?
This report may be relevant to those tracking alternative fuel adoption timelines and retrofit economics ahead of the IMO’s Net Zero Framework implementation. The findings suggest that fuel price movements, GHG intensity calculations, and regulatory reward mechanisms will play a larger role in retrofit decision-making than technical feasibility going forward. Parties monitoring bunker fuel demand shifts, including LNG bunkering infrastructure development, may find the payback comparisons useful context for anticipating fleet conversion trends.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
