Insufficient shipyard capacity could stymie alternative fuel conversions – LR
Lack of repair yards with experience in dealing with alternative fuels like ammonia and methanol could impede conversions of existing vessels to use these fuels, a new report by classification society Lloyd’s Register (LR) warns.
PHOTO: Top view of a ship being constructed at a shipyard. Getty Images
Ships require purpose-built engines to run on alternative marine fuels like ammonia and methanol. Engine components, fuel storage, piping and control systems need to be modified depending on the fuel type. Furthermore, safety measures must be incorporated into the vessel design to handle toxic fuels like ammonia onboard.
“Integrating an alternative fuel system on existing vessels – including engine, fuel preparation and storage tanks as well as the associated control and safety features - holds particular challenges for retrofit projects,” the LR report said.
The report forecasts that by 2030, 9,000-12,900 large merchant vessels could consider retrofitting their engines with alternative fuels like methanol and ammonia. On the other hand, most vessels built after 2030 will have zero- or low-emission fuel capabilities.
According to LR, retrofitting will require shipyards and skilled workers who have previous experience in handling such fuels and ships, which might be a challenge given the limited number of repair yards that can perform such conversions at the moment.
The report identified only 15 yards that currently have the ability to handle alternative fuel retrofits.
“Allowing a 60-day conversion period, these yards could be capable of handling up to 308 conversions in total each year,” LR said. This would take around 30-39 years to retrofit the estimated 9,000-12,000 vessels.
“Comparing this against the number of potential retrofit candidates for methanol and ammonia, it is clear that capacity would need to be increased dramatically to fulfil potential demand as interest in conversions increases,” LR added.
Slot availability in repair yards is another important factor to consider while assessing retrofit capacity.
“Repair capacity is already constrained and adding fuel retrofits will place further pressure on slots, potentially resulting in longer lead times and/or higher conversion costs,” LR asserted. LR estimated that retrofit costs will range from $10-13 million.
“For newbuild methanol vessels, there is limited evidence pointing to the fact that engines will cost similar to dual-fuel LNG equivalents. However fuel storage and fuel handling equipment will cost less, as methanol does not require cryogenic storage,” the report said.
“For ammonia, which requires as yet un-commercialised engine technology, fuel storage and handling, and additional safety technology, overall costs will be significantly higher.”
By Konica Bhatt
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