Discover how retrofitting ships with dual-fuel engines is reshaping maritime decarbonization. Learn about costs, benefits, challenges, and future trends.
Introduction
Global shipping is at a turning point. Responsible for carrying around 90% of world trade, the maritime industry also accounts for nearly 3% of global greenhouse gas (GHG) emissions. The International Maritime Organization (IMO) has adopted a strategy to reach net-zero emissions by 2050, a commitment that requires transformative shifts in fuel use, vessel design, and onboard technologies.
One pathway attracting growing attention is retrofitting existing ships with dual-fuel engines. Instead of relying solely on conventional fuels like heavy fuel oil (HFO) or marine gas oil (MGO), dual-fuel engines allow vessels to operate on cleaner alternatives—such as liquefied natural gas (LNG), methanol, or even ammonia—alongside traditional fuels.
For shipowners, this approach offers an appealing middle ground: extend the operational life of existing vessels while reducing carbon footprints, meeting regulatory requirements, and preparing for an uncertain fuel future. But the road to dual-fuel retrofits is paved with technical, financial, and regulatory challenges that demand careful consideration.
This article explores why retrofitting matters, the latest innovations in dual-fuel technology, case studies, real-world experiences, cost dynamics, regulatory drivers, and the outlook for shipping’s green transition.
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Why Retrofitting for Dual-Fuel Engines Matters
A bridge toward decarbonization
Building a new fleet of alternative-fuel-ready vessels is not financially or logistically feasible in the short term. Retrofitting offers a transitional solution: extend the life of ships built within the last 10–15 years while aligning them with global decarbonization goals.
IMO regulations—including the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII)—are pressuring shipowners to reduce emissions intensity. Retrofitting can provide compliance without immediate fleet renewal, giving operators breathing room.
Cost considerations versus newbuilds
A new dual-fuel vessel can cost 20–40% more than a conventional ship of similar size. For large containerships or tankers, this premium may reach $15–30 million. By comparison, retrofitting existing engines or installing dual-fuel conversion kits may cost less than half that figure, depending on vessel age, type, and design.
Fuel flexibility in an uncertain market
The global alternative fuels market is fragmented. LNG has been the frontrunner, but methanol is gaining traction with shipping lines like Maersk, while ammonia is being tested for long-term viability. Dual-fuel retrofits allow shipowners to hedge against uncertainty, ensuring vessels can run on traditional fuels if alternative supply chains lag behind.
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Key Developments and Innovations in Dual-Fuel Retrofitting
Retrofitting vessels to operate on dual-fuel systems has become one of the most practical short-to-medium-term strategies for reducing emissions. Rather than scrapping vessels with 10–15 years of service life remaining, shipowners are increasingly choosing to adapt engines and fuel systems so that they can run both on conventional fuels and on cleaner alternatives. This approach reduces emissions immediately while leaving the door open for deeper decarbonization in the future.
LNG Retrofits: The Most Mature Pathway
LNG has dominated the retrofitting space for more than a decade. Both two-stroke and four-stroke engines can be converted, and manufacturers such as Wärtsilä and MAN Energy Solutions have developed standardized packages to simplify the process. Wärtsilä’s Dual-Fuel (DF) engine program has already been applied to large container vessels, while MAN’s ME-GI retrofits are a common choice for LNG carriers and bulk ships.
The benefits are clear. Ships retrofitted to LNG achieve around 20 percent reductions in CO₂ emissions and cut SOx, NOx, and particulate matter by more than 90 percent, enabling compliance with IMO Tier III regulations and Emission Control Areas (ECAs). LNG’s dual-fuel flexibility also allows operators to fall back on marine diesel oil (MDO) when LNG prices spike or supply is constrained.
However, LNG retrofits are complex and costly, often ranging from $20 to $30 million per vessel. The installation of cryogenic storage tanks and double-walled piping requires significant space, sometimes reducing cargo capacity. For this reason, LNG retrofits are most attractive for younger ships, where the payback window is still viable.
Methanol Retrofits: The Fastest Growing Trend
While LNG is the most established, methanol has recently become the fastest-growing retrofit option. Interest surged in 2023 and 2024 after major operators such as Maersk and CMA CGM announced large orders for methanol-powered ships. Unlike LNG, methanol can be stored in ambient conditions and handled in conventional tanks with relatively minor modifications, giving it a cost advantage.
Retrofitting for methanol usually involves installing double-walled fuel lines, additional or repurposed tanks, and upgraded control and injection systems. Safety upgrades are essential, since methanol is both toxic and burns with a nearly invisible flame. Nonetheless, compared with cryogenic LNG or toxic ammonia, methanol is considered far simpler to integrate into existing ships. Costs remain significant—typically $10–15 million per vessel—but shipowners see long-term value because methanol can transition from fossil-based supply today to bio- or e-methanol in the future, offering a realistic pathway to carbon neutrality.
Ammonia Readiness: Preparing for Tomorrow
Ammonia is not yet commercially viable for retrofits, but it is widely seen as a future zero-carbon marine fuel. Shipowners and classification societies are laying the groundwork by developing “ammonia-ready” notations. In practice, this means a vessel may be retrofitted today for LNG or methanol, but with structural space, piping routes, and safety clearances designed so that an eventual ammonia conversion will be simpler and less costly.
Guidance from DNV, Lloyd’s Register, and ABS emphasizes that ammonia’s toxicity and corrosiveness will demand specialized tanks, ventilation, protective gear, and crew training before widespread adoption is possible. For now, ammonia readiness is more about future-proofing designs than immediate fuel switching.
Hybrid Retrofits with Energy Storage
An important parallel development is the addition of battery systems alongside dual-fuel engines. These hybrid retrofits allow batteries to handle peak power demands, stabilize variable engine loads, and provide silent zero-emission operation in ports or ECAs. The approach has been particularly successful in ferries, offshore support vessels, and harbor tugs, where frequent maneuvering or low-load operation makes batteries highly effective.
Reports from operators suggest fuel savings of 10–20 percent and reduced engine wear, along with improved passenger comfort through lower noise and vibration. While adding batteries requires extra space and investment, the payoff is especially strong in vessels with highly variable power profiles.
Strategic Role of Dual-Fuel Retrofitting
Taken together, dual-fuel retrofits represent a bridge strategy for the maritime sector. They offer immediate emissions reductions, extend the commercial life of younger ships, and hedge against fuel price uncertainty by preserving flexibility. Perhaps most importantly, they keep options open: a ship converted to run on LNG or methanol today can, with proper design choices, be upgraded later to ammonia or hydrogen as those fuels and infrastructures mature.
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Challenges and Practical Solutions
1. Technical complexity
Retrofitting is not a one-size-fits-all process. Engine room layouts, vessel age, and space availability affect feasibility. LNG requires cryogenic storage tanks, while methanol needs corrosion-resistant piping. These installations demand downtime in shipyards—often several weeks to months—causing operational disruptions.
Solution: Pre-fabricated modular fuel supply systems and standardized conversion kits are reducing retrofit time and complexity. Partnerships between engine manufacturers, classification societies, and shipyards help streamline the process.
2. High upfront capital costs
Retrofits can range from $5–15 million per vessel, depending on ship size and fuel type. Many owners hesitate to invest without clear long-term fuel policies or carbon pricing mechanisms.
Solution: Green financing, government subsidies, and charterer partnerships are emerging. For example, some charterers commit to paying green premiums, incentivizing shipowners to retrofit.
3. Fuel availability and bunkering infrastructure
Even with dual-fuel capability, retrofitted ships depend on reliable fuel supply. While LNG bunkering infrastructure has grown significantly, methanol and ammonia are still in early stages of global deployment.
Solution: Strategic retrofitting of vessels operating on established bunkering routes (e.g., Europe–Asia) ensures availability. Industry coalitions are working to expand methanol and ammonia bunkering hubs.
4. Safety concerns
Methanol is toxic, ammonia even more so, and LNG involves cryogenic handling. Retrofitting requires strict compliance with the International Code of Safety for Ships Using Gases or Other Low-flashpoint Fuels (IGF Code). Crew training and safety systems are critical.
Solution: Classification societies are providing updated notations and guidelines, while training institutions are introducing dual-fuel operation modules under the STCW Convention.
5. Unclear regulatory trajectory
IMO’s fuel lifecycle assessment (LCA) guidelines are evolving. Without certainty on carbon accounting, shipowners risk investing in retrofits that may not qualify for regulatory credits.
Solution: Continuous dialogue between regulators, classification societies, and industry stakeholders is essential. Early movers also gain reputational benefits, which can offset uncertainties.
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Case Studies and Real-World Applications
Case 1: Containership LNG retrofits
In 2022, a major European liner company converted a 15,000 TEU containership to dual-fuel LNG. The retrofit cost around $10 million, including installation of cryogenic tanks and supply systems. The vessel achieved a 20% reduction in CO₂ emissions and compliance with IMO Tier III NOx requirements.
Case 2: Methanol retrofits for tankers
In 2023, several medium-range product tankers underwent methanol retrofits led by MAN Energy Solutions. The cost per vessel was approximately $8–12 million, but operators gained the ability to burn both methanol and conventional fuels. These ships are now used in green-corridor projects backed by major charterers.
Case 3: Cruise ships preparing for dual-fuel operation
Cruise operators have begun retrofitting auxiliary engines to dual-fuel LNG systems. This not only cuts emissions in ECAs but also enhances public perception, as passengers increasingly demand greener travel.
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Future Outlook and Trends
Short- to mid-term (2025–2035): LNG and methanol dominance
Most retrofits over the next decade will focus on LNG and methanol, given their relative maturity and growing bunkering infrastructure. Hybrid retrofits with batteries will also gain traction.
Long-term (2035–2050): Ammonia and hydrogen potential
As zero-carbon fuels mature, dual-fuel retrofits may evolve into tri-fuel configurations, allowing vessels to run on ammonia, hydrogen, and conventional fuels. By 2050, many retrofitted ships may undergo second-stage conversions to align with IMO’s net-zero targets.
Increasing role of digitalization
Digital twins are being used to simulate retrofit outcomes, optimize fuel efficiency, and reduce risks. Remote monitoring and predictive maintenance will be integral to future dual-fuel operations.
FAQ
1. What is a dual-fuel engine retrofit?
It is the modification of a ship’s existing engine and fuel systems so it can run on both conventional fuels and alternative fuels like LNG, methanol, or ammonia.
2. How much does retrofitting cost?
Costs typically range from $5–15 million per vessel, depending on ship type, size, and chosen fuel.
3. Which fuel is most popular for retrofits today?
LNG dominates, but methanol is rapidly emerging as the preferred choice for new retrofits due to easier handling and storage.
4. How long does retrofitting take?
Typically 6–12 weeks of shipyard time, though pre-fabricated systems can shorten this.
5. Are retrofitted ships future-proof?
They provide flexibility, but long-term competitiveness depends on regulatory changes, fuel availability, and ongoing technological advancements.
6. What are the safety risks?
Risks depend on the fuel: LNG requires cryogenic handling, methanol is toxic, and ammonia is corrosive and hazardous. Strict compliance with safety codes is mandatory.
7. Do retrofits guarantee compliance with IMO targets?
They help reduce emissions and comply with near-term IMO measures like EEXI and CII, but further adaptations may be needed to meet net-zero by 2050.
Conclusion
Retrofitting ships with dual-fuel engines represents one of the most pragmatic strategies for maritime decarbonization. It balances cost, feasibility, and regulatory compliance while extending the life of existing fleets.
Although challenges remain—particularly around costs, infrastructure, and safety—ongoing innovation and policy support are helping overcome barriers. Case studies already show successful reductions in emissions and operational benefits.
As the shipping industry navigates its path to 2050, dual-fuel retrofits will play a central role. They are not a silver bullet but a critical bridge, enabling today’s fleets to sail toward a cleaner, more resilient maritime future.
References
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International Maritime Organization (IMO). (2023). Revised Strategy on Reduction of GHG Emissions from Ships.
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International Chamber of Shipping (ICS). (2024). Fuel Transition Pathways for Shipping.
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Wärtsilä Corporation. (2023). Dual-Fuel Retrofit Solutions for Existing Fleets.
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MAN Energy Solutions. (2024). Methanol Retrofit Projects and Market Outlook.
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Lloyd’s Register. (2024). Ammonia-Ready Ship Design Guidelines.
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DNV. (2023). Maritime Forecast to 2050.
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European Maritime Safety Agency (EMSA). (2024). Alternative Fuels and Maritime Safety.
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Clarkson Research. (2024). Retrofitting Economics in the Shipping Industry.
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Maersk Group. (2023). Methanol-Fueled Shipping Projects.
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United Nations Conference on Trade and Development (UNCTAD). (2024). Review of Maritime Transport.
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The Maritime Executive. (2023–2024). Various articles on dual-fuel retrofits and alternative fuels.