Upgrade pathways, fuel-ready concepts and monitoring services are becoming more important than raw performance alone.
Options provide flexibility and create convertibility.
When options are more of a sales argument than a reliable pathway.
Three levels: immediately usable, structurally prepared, prospectively announced.
Until a few years ago, the business model of major engine manufacturers was straightforward: an engine was designed for a defined fuel, sold and supported with spare parts over its service life. Revenue came from the initial sale and the long-term aftermarket business. The relationship was linear.
This has changed fundamentally. MAN Energy Solutions, Waertsila and WinGD no longer sell just engines but optionality. The MAN ME-C can be retrofitted to ME-GI (LNG), ME-LGIM (methanol) or ME-LGIP (LPG). Waertsila positions the entire 31 series as cross-platform convertible. WinGD offers similar flexibility with the X-DF concept.
From the manufacturers' perspective, this is a logical response to market uncertainty. When nobody knows which fuel will prevail, you sell the ability to switch later. This generates multiple revenue streams: first the engine itself, second the ready package as an add-on option, third the later conversion as an engineering service, and fourth the new spare parts for the converted system.
For the manufacturer, this is excellent business. The margin on a ready package is high because the effort during initial installation is modest, yet the later conversion remains tied to the same manufacturer. A lock-in effect emerges: whoever has a MAN methanol-ready package will have the conversion carried out by MAN, not by a third party.
Service contracts have changed accordingly. Manufacturers increasingly offer lifecycle agreements that cover not only spare parts supply but also future conversions, software updates and performance optimisation. The business model is shifting from product sales to platform-based service.
For shipowners and technical managers, the options model opens genuine opportunities. The ability to convert an engine to a different fuel later reduces the risk of a wrong investment. If methanol turns out not to be the optimal fuel for one's fleet, the option to switch to LNG or LPG remains, at least theoretically.
The pitfalls lie in the details. First: optionality has a price. Ready packages cost between USD 500,000 and two million per engine. This investment must amortise at some point. If the option is never exercised, it was a lost premium. Second: not all options are equal. An LNG-ready package for an ME-C engine has a different technical depth than an ammonia-ready concept based on technology that is not yet production-ready.
Third: manufacturer dependency. Whoever buys a ready package from MAN is reliant on MAN for the conversion. There is no free market for ME-LGIM conversions. This means the manufacturer holds a strong negotiating position on later pricing. Operators should contractually secure conversion costs at the time of ordering the ready package, not at the point of actual conversion.
Fourth: time horizons often do not align. A ready package is defined at the time of engine ordering, i.e. two to three years before delivery. The conversion may take place five to ten years after delivery. Over this period, technical requirements, class rules and manufacturer specifications can change. A ready package from 2023 does not necessarily fully cover the conversion requirements of 2033.
A Scandinavian ferry operator ordered two RoPax newbuilds in 2022 with Waertsila 31DF engines running on LNG and a methanol conversion pathway. The conversion option was contractually secured at a fixed price of EUR 1.8 million per engine, valid for five years from delivery. When methanol bunkering infrastructure expanded in Baltic ferry traffic in 2026, the operator could exercise the option and carry out the conversion at a predictable cost.
An Asian tanker operator purchased VLCC newbuilds in 2021 with ME-C engines and a general alternative-fuel-ready label, without specific contractual security on conversion costs. When he considered an ammonia conversion in 2025, it turned out that whilst the engine was fundamentally convertible, the actual costs were 40 per cent above initial estimates because class rules changed in the interim, requiring additional safety systems.
Operators should evaluate every options offering across three levels. First level: is the option immediately usable, meaning can it be exercised at the next docking? Second level: is the option structurally prepared, i.e. are physical preparations present on the engine and in the vessel? Third level: is the option only prospectively announced, based on technology that is not yet production-ready or class-approved?
Only options at the first and second level carry a robust economic value today. Options at the third level are, at best, a statement of intent and, at worst, a sales argument without substance.
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