LR report sees surge in methanol engine retrofits in 2023, calls it a ‘defining trend’

One of the defining trends of the year was the surge in methanol engine retrofits, according to classification society Lloyd’s Register (LR) on Thursday (11 January) on its analysis of vessel ordering, technology and fuel developments.

More than 100 retrofitted vessels are due to join the only methanol conversion currently in operation, Stena Germanica, which converted in 2015. Alternative fuel conversions were explored in detail in LR’s Engine Retrofit Report, which identified a significant gap in potential demand for retrofits and the current capability and capacity of yards to handle them.

With the combination of global emissions reduction targets, carbon pricing and performance measures now in place, the dynamics of ship ordering, LR said technology development and fuel supply are shifting rapidly. 

With just 27 methanol-capable vessels currently in service, 143 new construction orders were placed in 2023, which including previous orders will take the methanol-capable fleet to 227, according to data from Clarksons.

Ammonia engine technology moved closer to maturity in 2023, with the commercial launch of Wärtsilä’s first ammonia four-stroke engine, the first full-scale two-stroke engine tests by MAN Energy Solutions and the first approval-in-principle for an ammonia two-stroke engine, granted to WinGD’s X-DF-A engine concept by LR. A key signal of the urgency of shipping’s decarbonisation agenda and the potential of ammonia as a carbon-free energy carrier is the fact that four firm orders have already been placed for ammonia-fuelled vessels, all in 2023 and two classed by LR, with several more orders under discussion or publicly reported.

Orders for vessels powered by fossil-based alternative fuels, which will need to be replaced by synthetic or biomass-derived equivalents to allow zero- or near-zero emissions, also continued to surge in 2023. Orders to the end of the year will increase the LNG-fuelled fleet by 90% to 1,938 vessels and the LPG-fuelled fleet by 78% to 189 vessels. Overall, ordering of alternative fuelled vessels reached its highest volume ever in 2023. Combined with emerging demand for alternative fuel conversions, those orders are an early positive indicator that the global fleet could be technically capable of meeting IMO’s 5-10% target for zero- or near-zero carbon fuel use by 2030.

Onboard carbon capture is also increasing in maturity, with 16 retrofits contracted for in 2023 taking the total orders to 22 vessels on top of an existing fleet of 31. The greater activity reflects the evolving marinisation of the technology, with LR issuing Approvals in Principle to Rotoboost and Erma First last year. Eleven of the retrofits booked in 2023 are for vessels a decade or older, indicating that owners are using carbon capture as a solution to see ageing vessels through their life, complying with regulations for the next decade or so without the need for fuel conversion.

Alternative fuel readiness

Realisation of the IMO’s 2030 target will depend on fuel availability as well as shipboard technology. The Zero Carbon Fuel Monitor from LR’s Maritime Decarbonisation Hub has tracked the technology, investment and community readiness of key candidate zero and near-zero emissions fuels across the supply chain since 2018. 

Its latest update in October 2023 – as well as the recent ‘Future of Marine Fuels’ report – show that despite concrete developments in fuel supply over 2023, including the first orders for ammonia bunkering barges and large-scale green methanol supply contracts, supply needs to be scaled up significantly for many fuel candidates.

Among the general themes behind rising readiness levels is a significant scale-up of renewable energy harvesting, driving increased investment readiness of green fuels resources. Additionally, there has been a notable rise in the number of national hydrogen strategies and establishment of production facilities. The increasing acceptance and deployment of carbon capture, utilisation and storage has also contributed to greater viability of ‘blue’ fuels that offer an alternative to fuels produced entirely by using renewable electricity.

Photo credit: Chris Pagan on Unsplash
Published: 12 January, 2024