Alternative Fuels

LR: Retrofit or newbuild? The challenge for shipowners seeking future carbon compliance

‘We estimate that at least 45% of ships today will not be compliant with carbon intensity regulations in three years’ time. Owners are asking us many more questions,’ says Nikos Tsatsaros of LR.

Published

2 years ago

April 10, 2023

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Classification society Lloyd’s Register recently published an article on the growing demand for replacement ships as shipowners face more carbon regulations targeting older, less efficient ships. Three Lloyd’s Register experts share their views on whether it’s wiser to retrofit an existing vessel to improve its carbon ratings or replace it with a new one:

As Program Manager of LR’s Maritime Decarbonisation Hub, Charles Haskell is well-placed to outline challenges facing shipowners today as they weigh up the options of retrofits versus new so-called ‘future-proofed’ newbuild ships. The reality is no ship can be fully future-proofed yet because the marine fuels of the future are still under development and there are few rules, designs or builders, no crews, and no managers for the ships of tomorrow.

Perhaps most importantly from a Class point of view, there are no safety frameworks yet, though Haskell and his team are engaged in an ammonia-for-fuel project. It is focusing on a detailed quantitative safety risk assessment spanning several industrial sectors, outside shipping, over several decades.

But the reality is that ship designers cannot even offer blueprints yet; shipbuilders don’t know what materials will be required; repairers have no experience of new fuel technologies; ships’ crews are not trained to handle new fuels or operate ships which use them; and shipowners’ land-based staff, including experienced superintendents, will need to learn about new fuel supply systems, storage, and combustion technologies.

Haskell refers to the Maritime Just Transition Task Force, set up during COP26, in which LR was involved, which has concluded that no fewer than 800,000 seafarers will need to be trained by 2030.

Three decades of retrofits

Haskell has clear views on the question of retrofit or replace. He points to analysis from The Silk Alliance, an initiative set up by the LR Maritime Decarbonisation Hub of 11 members (now 12) that has developed a future fuel framework to enable the setting up of a scalable green corridor cluster. Their analysis has revealed that quite apart from existing ships, 20-30% of those that are built in the years ahead will need to undergo retrofits before 2050.

That means, Haskell explains, that the challenge facing owners and operators today is not only what to do with existing ships, especially younger ones; it is also how to ensure that ships designed and built in the balance of this decade can be retrofitted effectively and economically before the middle of the century.

Nikos Tsatsaros is LR’s New Constructions Sales Director. He has seen a significant change in owners’ thinking over the last year. “There is now a realisation that the clock is ticking,” he says. “We have moved on from theory; two years ago, they were asking ‘what is ammonia, what is methanol?’

“Our clients realise that they need a technical understanding of what is coming and to understand the technologies and how they work, how crews can be prepared, and how ships may be designed and operated. They certainly need to know that there will be an acceptable return on investment. And they realise that collaboration with charterers is essential.”

Complex charter negotiations

Tsatsaros reveals that charter negotiations on new ships are growing in complexity. For owners, adopting new technologies is about investment returns and therefore close attention is required to clauses in the charterparty agreement relating to ship performance. On new projects that are under development, Tsatsaros sees some charterers who are proving to be supportive, others who are not. More collaboration is required.

“We have an essential role to play here. Our vision is to be the trusted adviser to our clients, whether it be in new construction or retrofits. Charterers’ strategies vary and some say that extra costs are for an owners’ account. Others are more realistic If the cost of providing the service goes up, the charterer will have to pay more. I think charterers’ views are softening. It’s a matter of collaboration between different stakeholders.”

Retrofits on younger ships often make good sense, he says, but options become limited on older vessels where significant capital investment won’t pay back over the vessel’s operational lifespan. Meanwhile, some new technologies cannot be installed on existing ships and the cost of a retrofit could actually work out to be more expensive. In these cases, LR’s cost benefit analyses can prove invaluable, he says.

Tsatsaros also stresses the broad range of owners and their access to resources. The industry’s leading pioneers, such as major container lines, have sufficient muscle to test new fuels on their own, but most shipowners lack the resources for this.

“Smaller owners want advice on available options, techno-economic guidance, and involvement in joint development projects. We are engaged in a large number of these, across both newbuild and retrofit projects,” he says.

Practical aspects are key considerations. “When owners have understood the new technologies that are likely to become available, they are asking how ships can be made ready today for economically viable modifications tomorrow. And, of course, there are different levels of ‘readiness’.”

“As an adviser, we can step in and say: ‘These are the options. Here’s how we can help you. Let’s work with a designer, a shipyard, an engine builder, and others, to identify the best strategy and develop something that best suits your needs.’”

Speaking of the existing fleet, Tsatsaros says there is no time to lose. “We estimate that at least 45% of ships today will not be compliant with carbon intensity regulations in three years’ time. Owners are asking us many more questions; what’s happening in China, what’s happening in South Korea, are there enough shipyards?

“This last question is important from a retrofit perspective. If there are no newbuilding slots available, then retrofitting older ships may be the only option. If there is a proper cost analysis and a good charterparty where the charterer is willing to share the cost, then you have an asset with another ten years of viable operation. However, my concern is that charterers may not yet be ready to support retrofit projects. Of course, it depends, and must be viewed on a case-by-case basis.”

Note: The full article ‘Retrofit or newbuild? The challenge for shipowners seeking future carbon compliance’ can be found here.

Photo credit: Lloyd’s Register
Published: 10 April, 2023

FuelEU

FincoEnergies launches pooling service for FuelEU Maritime compliance

FuelEU Pooling service enables undercompliant vessels to meet their compliance targets by pooling with vessels running on GoodFuels sustainable bio bunker fuels.

Published

8 hours ago

April 21, 2025

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GoodFuels biofuel supplier FincoEnergies on Wednesday (16 April) announced the launch of its FuelEU Pooling service, created to enable shipowners to meet FuelEU Maritime compliance in a cost-effective way.

FuelEU Maritime, effective from 1 January 2025, mandates the reduction of greenhouse gas intensity of energy used on board ships trading in the EU. For many operators, particularly those with limited access to low-carbon fuels, compliance can be both complex and costly.

Designed for shipowners, operators, charterers, and technical managers, FincoEnergies’ FuelEU Pooling service enables undercompliant vessels to meet their compliance targets by pooling with vessels running on GoodFuels sustainable biofuels, when these vessels are overcompliant and have ‘Surplus’ emission reduction available for allocation.

FincoEnergies also partnered with Lloyd’s Register (LR), who supported the development of the service. Their technical expertise has enabled shaping a solution that aligns with both regulatory requirements and FincoEnergies' established position as a biofuel supplier in the fuel supply chain.

“FuelEU Maritime represents one of the most important regulatory shifts for the shipping industry in decades,” said Alberto Perez, Global Head, Maritime Commercial Markets at LR. “By integrating technical expertise with strategic guidance, we ensure shipowners, operators, and suppliers not only comply with evolving emissions standards, but also proactively transform their operations, embracing new technologies and alternative fuels to ensure a sustainable and profitable future.”

“With a decade of experience in biofuel bunkers and carbon certificate trading in the voluntary market, we are excited to expand our creative and solution-oriented product portfolio with FuelEU Pooling,” said Johannes Schurmann, Commercial Director International Marine at FincoEnergies.

“Thanks to our physical presence in the supply chain, shipping companies looking for FuelEU surplus can confidently rely on us as a trusted partner in their decarbonisation journey.”

Through its role as Pool Organiser, FincoEnergies streamlines the entire pooling process – from performing biofuel bunkers and prefinancing Surplus, to Surplus allocation and pool verification. With cost-effective pricing, FuelEU Pooling provides shipping companies with a competitive alternative for changing their fuel mix themselves.

Photo credit: FincoEnergies
Published: 21 April, 2025

LNG Bunkering

Ballast Nedam Infra and Hakkers Waterbouw to build sea jetty for new LNG terminal

Jetty, which will be built as part of a LNG terminal in Germany, will be equipped to receive ships up to 267,000 m³; a smaller berth will be built for LNG bunker vessels and barges.

Published

8 hours ago

April 21, 2025

Admin

Ballast Nedam Infra and Hakkers Waterbouw to build sea jetty for new LNG terminal

Netherlands-based Hakkers Waterbouw recently said it will be partnering with Ballast Nedam Infra for the construction of a large sea jetty as part of a new LNG terminal in Brunsbüttel, Germany.

The jetty will be equipped to receive ships up to 267,000 m³. In addition to the main berth, a smaller berth will also be built for LNG bunker vessels and barges. The jetty offers an unloading capacity of 14,000 m³ per hour and a loading capacity of 3,000 m³ per hour.

“The development of the LNG terminal and sea jetty fits in with the growing demand for sustainable energy solutions in Europe,” Hakkers said on its website.

“The project contributes to the European energy transition and to a safe, reliable energy supply for the future. With this collaboration, Ballast Nedam Infra and Hakkers Waterbouw are taking an important step in the realisation of sustainable infrastructure and further European collaboration.”

The order was placed on behalf of German LNG and will be executed as a subcontractor to main contractor CS Gas North. This is a collaboration between the Spanish companies Cobra and Sener.

Construction of the sea jetty will start in the summer of 2025 and is expected to be completed in early 2027.

Richard Majoor, director at Ballast Nedam Infra, said: “In combination with Hakkers and CS Gas North, we want to build a proactive and efficient collaboration.

“Ballast Nedam and Hakkers complement each other well: Ballast Nedam has extensive experience in project management for complex construction projects, while Hakkers, as a specialist in hydraulic engineering and steel construction, adds substantive value.”

Hein van Laar, commercial director at Hakkers Waterbouw, added: “As a specialist in heavy hydraulic engineering piling and steel construction, we are particularly proud to realise this project. We see that we can really add something in Germany with our expertise.”

Photo credit: Hakkers Waterbouw
Published: 21 April, 2025

Newbuilding

Chinese shipbuilder delivers CMA CGM’s Singapore-flagged LNG-powered boxship

CMA CGM welcomes “CMA CGM SEINE”, the first in a four-ship series of 24,000 TEU LNG dual-fuel container ships, by Hudong-Zhonghua Shipbuilding, according to BV Marine & Offshore.

Published

4 days ago

April 17, 2025

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Chinese shipbuilder delivers CMA CGM’s Singapore-flagged LNG-powered boxship

Bureau Veritas Marine & Offshore (BV) on Wednesday (16 April) announced the successful delivery of CMA CGM SEINE, a new 24,000 TEU LNG dual-fuel container ship, by Hudong-Zhonghua Shipbuilding (HZSY).

This milestone marked the completion of the first vessel in a four-ship series, with BV providing classification and BV Solutions Marine & Offshore (BVS) providing advisory services.

It is CMA CGM’s first LNG-powered vessel flying the Singaporean flag with a capacity of 24,000 TEU.

It was reported that CMA CGM planned to expand its fleet and vessel tonnage, adding more vessels under the Singapore Registry of Ships. To support the transition to more sustainable fuels, CMA CGM said it would register and bunker alternative fuel vessels under the Singapore flag.

Xavier Leclercq, Vice President of CMA Ships, said: “Today’s delivery of the ‘CMA CGM SEINE’ featuring LNG as fuel at such a large scale, will remain a major landmark in the shipping world and embodies the engagement of the CMA CGM group toward an ambitious decarbonisation path, leading the way to our industry.”

Mr. Xiufeng ZHANG, Vice General Manger of Hudong-Zhonghua shipyard, said: “CMA CGM SEINE, as the lead ship of the four 24,000-TEU LNG dual-fuel powered container ships ordered by CMA Ships from our company, stands as a new-generation maritime ‘Green Giant’ and ‘super cargo hauler’.”

The vessel integrates a dual-fuel propulsion system supported by GTT Mark III membrane-type LNG bunker tanks, with a total capacity of 18,600 cubic meters, designed to enhance both environmental performance and operational efficiency.

Measuring 399.9 meters in length and 61.3 meters in beam, the vessel has a carrying capacity of 23,876 TEU and is equipped with a WinGD W12X92DF-2.0 dual-fuel main engine, incorporating the Intelligent Control by Exhaust Recycling (iCER) system.

This configuration significantly reduces methane emissions and enables compliance with IMO Tier III emission standards when operating in "Diesel + iCER mode".

BV worked closely with the engine manufacturer and the shipyard to test the parent engine and issued the Engine International Air Pollution Prevention (EIAPP) certificate, establishing a foundation for compliance across the series. The iCER system optimises energy efficiency, achieving an Energy Efficiency Design Index (EEDI) reduction well beyond the IMO’s Tier III standards.

To address the critical sloshing challenges in large-volume LNG bunker tanks, BVS performed direct computational fluid dynamics (CFD) simulations. The verified pressure data was provided to the design unit for structural strength checks, ensuring the safety of the cargo containment system and hull support structure.

The vessel features advanced technologies to boost operational performance and energy efficiency. Equipped with the SmartEye intelligent monitoring system and the TotalCommand full-control system, it achieves automated precision control during berthing, significantly reducing berthing time and enhancing port operations.

Energy efficiency is further improved by applying variable frequency drive (VFD) technology to the engine room fans and seawater cooling pumps. Meanwhile, the WinGD Data Collection Monitoring (DCM) system offers real-time tracking and analysis for the dual-fuel main engine, supporting operational optimisation.

BV also supported the upgrade of BV certified boil-off gas (BOG) compressors by conducting sea trial tests and re-issuing product certificates, facilitating seamless system commissioning and vessel delivery.

Photo credit: Bureau Veritas Marine & Offshore
Published: 17 April, 2025