From Waves to Watts: How LNG Retrofits Are Steering the Maritime Industry Toward a Greener Future

The maritime industry is navigating uncharted waters as it races to meet tightening carbon regulations. In 2024, shipowners are turning to liquefied natural gas (LNG) retrofits as a quick fix to slash emissions, according to Lloyd’s Register’s (LR) latest Engine Retrofit Report. But while the industry is making strides, the journey toward sustainable shipping is far from smooth sailing.

The Rise of LNG Retrofits: A Short-Term Lifeline

LNG has emerged as the go-to solution for shipowners looking to comply with stringent emissions regulations. In 2023 alone, over 305 LNG-fueled ships were ordered, making up 14% of newbuilding orders—a figure that dwarfs methanol and ammonia alternatives. This surge reflects the industry’s scramble for immediate carbon reductions, but it’s not without its challenges. Methane emissions and the uncertain availability of bio- and e-LNG remain significant hurdles. Still, with zero-emission fuel supply chains still in their infancy, LNG is seen as the most practical retrofit option for now.

Supply Chain Bottlenecks: The Hidden Roadblock

While the demand for retrofits is growing, the industry’s ability to deliver is being tested. Supply chain readiness is a critical factor, with LR warning that lead times for conversion projects could stretch beyond 18 months without better coordination between engine manufacturers, fuel system suppliers, and shipyards. The good news? Recent amendments to the MARPOL Annex VI NOx Technical Code are expected to ease certification challenges, offering a glimmer of hope for smoother retrofits.

Shipyard capacity is another pressing issue. Although the number of yards capable of handling alternative fuel conversions has grown to around 16—primarily in China and the Middle East—current retrofit capacity stands at approximately 465 vessel conversions annually. That’s well below the projected peak requirement of over 1,000 conversions per year. To address this, LR has developed a methodology to help shipowners evaluate potential shipyard partners, ensuring they can meet retrofit project demands.

Looking Ahead: The Race to Scale Up

Despite a slow start to 2024, engine designers are gearing up for future market demands. With retrofit projects boasting shorter lead times than newbuilds, LR predicts a wave of announcements in 2025 for projects slated for completion in 2026 and 2027. However, the industry’s long-term success hinges on scaling up alternative fuel supply chains and securing greater regulatory clarity.

Claudene Sharp-Patel, LR’s Global Technical Director, sums it up: “Technology and shipyard capacity are improving, but without decisive action to scale up alternative fuel supply chains, shipowners will face increasing compliance costs and operational uncertainty. We need greater regulatory clarity and investment to bridge the gap between ambition and action.”