In an uncertain market, selective modernisation can be more robust.
When remaining service life and platform quality are still good.
It forces a harder look at asset evaluation.
Treat retrofit as an independent strategic pathway.
A retrofit in the maritime context can vary in depth. The lightest variant is an optimisation of the existing system: turbocharger upgrades, injection system modernisation or the retrofitting of exhaust gas aftertreatment such as scrubbers or SCR catalysts. These measures improve the emission profile without altering the basic propulsion.
The intermediate stage involves the installation of a dual-fuel kit. The existing main engine is modified so that, in addition to conventional fuel, it can also burn methanol, LNG or ethanol. MAN Energy Solutions offers such conversion packages for its MC/ME engines, with the effort ranging between 8 and 24 months of planning and yard time depending on engine type and fuel pathway.
The deepest stage is a complete engine replacement including all auxiliary systems. This amounts to a quasi-newbuilding of the engine room and is economically viable only for vessels with substantial remaining service life and high platform value. In practice, this variant is primarily pursued for cruise ships and large tankers whose hull still offers 20 or more years of operational capability.
Common to all retrofit variants is the need for careful advance planning. Integrating new systems into an existing hull is structurally more demanding than a newbuilding because space constraints, weight distribution and existing system interfaces must be accounted for. Yet this is precisely where the advantage lies: a well-planned retrofit makes optimal use of the existing asset rather than replacing it prematurely.
The economic logic for retrofit is strengthened by several factors. First: newbuilding prices have risen considerably in recent years, driven by yard utilisation, steel prices and the complexity of new propulsion technologies. A container vessel newbuilding that cost USD 120 million in 2020 now ranges between 170 and 200 million. A retrofit of the same type can come in at 15 to 30 million – a fraction of newbuilding costs.
Second: delivery times. The major yards in South Korea and China are fully booked until 2028 or 2029. A retrofit, by contrast, can often be planned within 12 to 18 months and executed during a regular yard stay, considerably shortening the time to operational improvement.
Third: regulatory uncertainty. Anyone ordering a newbuilding today makes a fuel choice for the next 25 to 30 years. The regulatory landscape will with high probability change multiple times during this period. A retrofit enables a step-by-step adaptation – first optimise, then retrofit dual-fuel, later take more far-reaching measures if necessary.
In the ferry segment, methanol retrofits have proved particularly practicable. Stena Line demonstrated with the Stena Germanica that a conversion to methanol operation is feasible whilst maintaining regular liner service. The experience gained from this project has laid the groundwork for further conversion projects across the industry.
In the offshore segment, battery-hybrid solutions are increasingly being retrofitted. Norwegian supply vessels and wind farm service vessels are combining conventional propulsion with battery storage to reduce fuel consumption and emissions during DP operations. These projects likewise confirm: the existing hull frequently carries more modernisation potential than is apparent at first glance.
In the container segment, retrofits remain less common, as the large liner operators primarily rely on new orders. For smaller and mid-sized operators with older but structurally sound tonnage, however, the retrofit pathway can represent the economically superior solution.
Retrofit is the better choice when three conditions are met: first, the remaining platform quality must justify the intervention – hull condition, steel thickness and basic system architecture must be fit for at least ten more years of operation. Second, the conversion costs must stand in reasonable proportion to the vessel’s residual value – as a rule of thumb, they should not exceed 30 per cent of the newbuilding price of a comparable vessel. Third, the regulatory improvement achieved by the retrofit must be sufficient to keep the vessel compliant for the planned operational period.
If any of these conditions is not met, a newbuilding or a sale may be the economically wiser decision. The art lies in conducting this assessment soberly and without attachment to the existing asset.
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