Retrofitting Marine Engines for Methanol Use
By retrofitting existing vessels to use methanol as a fuel, shipowners can gradually adapt their fleets to minimize their environmental impact without the need to build entirely new ships. By 2046, it is estimated that 35,000 ships will be retrofitted to use zero-emission fuels*. This approach offers a practical pathway to align with the Paris Agreement and achieve net-zero emissions by 2050. While headline-grabbing figures on methanol newbuilds have been significant, they represent only the tip of the iceberg. The real bulk of the numbers are coming from the retrofit orders.
Why Retrofitting is an Attractive Option
Amid limited shipyard capacity and rising newbuild costs, retrofitting offers a flexible solution that reduces emissions and maximizes the use of existing fleets. By choosing to upgrade vessels rather than invest in new builds, shipowners can adapt more efficiently to macroeconomic pressures and industry demands.
Shipyard Capacity
Global shipyards are experiencing high demand, resulting in limited availability of construction slots. As of early 2024, shipowners looking to place newbuild contracts at tier-one yards in China, Korea, or Japan are facing delivery dates as late as 2027**. Securing a slot for retrofitting tends to offer more flexibility, allowing shipowners to upgrade their existing fleets sooner and avoid the long wait times associated with new builds.
Key Considerations:
Limited Availability: Shipyards are often at full capacity, handling maintenance, new builds, and retrofits, leading to longer wait times.
Prioritization: Shipowners should evaluate which vessels can benefit most in terms of fuel efficiency and operational lifespan. Vessels that are newer or more adaptable to methanol systems should be prioritized, while older ships might need to be retired or considered for alternative solutions.
Long Lead Times: Planning for retrofitting requires early scheduling, as shipyard slots may be booked years in advance. Proactive planning helps secure available slots and ensures timely execution
Newbuild Costs
Newbuilding prices have risen significantly, reaching their highest levels in 16 years. Since late 2020, prices have increased by 53%, with a 3% rise in the first half of 2024 alone. This surge is attributed to factors such as increased demand, higher raw material costs, and limited shipyard capacity. ***
Factors Influencing Costs and Availability:
High Demand for Specific Vessel Types: There has been a surge in orders for LNG carriers and container ships, which has occupied significant shipyard capacity.****
Rising Material and Labor Costs: Inflationary pressures have led to increased costs for materials and labor, further driving up newbuild prices.*****
Shipyard Capacity Constraints: Many shipyards are operating at full capacity, with limited slots available for new projects, leading to longer waiting times for newbuild deliveries.**
Technical and Operational Considerations
Retrofitting marine engines for methanol presents a range of technical and operational challenges that must be addressed to ensure a successful transition. Addressing these factors is crucial for optimizing fuel efficiency, ensuring safety, and achieving compliance with environmental regulations. Below are key areas that need attention during the retrofitting process.
Fuel Storage and Delivery Systems
One of the most critical aspects of retrofitting for methanol is upgrading the fuel storage and delivery system. This requires the installation of separate tanks for methanol to ensure physical separation from the existing fuel system, preventing cross-contamination and ensuring safe handling. Given methanol’s lower energy density, additional storage capacity or the repurposing of existing tanks may be necessary, especially for vessels in need of larger storage solutions. For vessels using dual-fuel systems, maintaining this physical separation is crucial to minimize risks related to handling multiple fuel types on board.
Retrofitting Timeframe
The planning and execution period for retrofitting a vessel span approximately five years. After the retrofit, the vessel can operate for another 10-15 years before requiring further upgrades. Given this long planning horizon, shipowners must decide whether retrofitting an older vessel is more cost-effective than selling it and investing in a new build.
Fuel Module Upgrades
Retrofitting a vessel involves more than just engine modifications. The entire fuel system must be adapted to accommodate methanol, which includes upgrading the fuel module to handle the new fuel safely. Methanol has different chemical properties than conventional marine fuels, requiring specific fuel module designs.
Exhaust System Modifications
In addition to fuel system upgrades, retrofitting for methanol use may require modifications to the exhaust system. Methanol combustion can produce different emissions compared to traditional fuels, necessitating adjustments to exhaust treatment systems to ensure compliance with environmental regulations and optimize emission reductions.
Overcoming Challenges and Embracing Opportunities
Retrofitting ships to use methanol comes with challenges, such as installing cofferdams for storage tanks, modifying fuel systems, and addressing limitations in bunkering infrastructure. Despite these obstacles, methanol is gaining traction as a viable alternative marine fuel. Industry stakeholders, governments, and environmental organizations are increasingly recognizing methanol’s role in decarbonizing maritime transportation. Initiatives like the Methanol Institute’s Methanol-Fueled Ship & Bunker project and the Getting to Zero Coalition’s efforts are paving the way for broader adoption of methanol-powered vessels.
Conclusion: Retrofit or New Build?
Ultimately, the decision to retrofit an existing vessel or invest in a new methanol-powered ship depends on several factors, including the age of the vessel, its operational profile, and shipyard availability. Retrofitting offers a quicker and potentially more cost-effective solution to meet upcoming environmental regulations, while new builds might offer long-term advantages, especially for shipowners looking to future-proof their fleets. As the maritime industry continues to evolve, methanol retrofits provide a practical step toward a more sustainable future. Shipowners must weigh their options carefully, considering both the immediate and long-term implications of their choices.
Sources:
* Lloyd’s Register: https://www.lr.org/en/knowledge/horizons/march-2023/retrofit-or-newbuild-the-challenge-for-shipowners-seeking-future-carbon-compliance/ | ** Seatrade Maritime: https://www.seatrade-maritime.com/shipyards/shipbuilding-outlook-for-2024-newbuild-orders-expected-to-slow | *** Marine Link: https://www.marinelink.com/news/shipbuilding-prices-climb-highest-level-514441 | **** Clarksons Research: https://insights.clarksons.net/2022-shipbuilding-review/ | ***** Seatrade Maritime: https://www.seatrade-maritime.com/shipyards/steepest-rise-in-newbuild-prices-for-almost-20-years
Content contributor
David Hammarström, Technical Project Development Manager, Liquid Wind
Joost Weterings, Commercial Director, Liquid Wind