WinGD Finds LNG Retrofit Offers Fastest Payback Among Alternative Fuel Options
Key Takeaways
- •WinGD's Fuel Economics Report analyzed a 16,000-TEU container ship converted in 2030 to LNG, methanol, or ammonia using its dual-fuel engines.
- •All three alternative-fuel retrofits outperformed continued use of very low sulfur fuel oil over the vessel's lifetime under the study's assumptions.
- •LNG provided the strongest and earliest financial return with an estimated six-year payback, while ammonia and bio-methanol delivered deeper emissions reductions over longer payback periods.
- •Achieving a five-year payback across fuel pathways would require subsidies of $126-330 per tonne of CO2 equivalent, similar in scale to the US$100-380 remedial units considered under the IMO's Net Zero Framework.
- •WinGD stated that retrofit technology is no longer the main limiting factor, with commercial outcomes driven more by fuel price, GHG intensity, and regulatory signals.
Converting an existing vessel to LNG propulsion could give shipowners the quickest financial return among the alternative-fuel options examined by WinGD, the marine engine maker said in an emailed statement on Monday.
WinGD's latest Fuel Economics Report analyzes a 16,000-TEU container ship converted in 2030 to run on LNG, methanol, or ammonia using the company's dual-fuel engines. Under the assumptions used in the study, all three options came out ahead of continued use of very low sulfur fuel oil (VLSFO) over the vessel's lifetime. The retrofit focus reflects a practical constraint in shipping's decarbonization push: the existing fleet is young relative to typical vessel lifespans, so replacing it quickly enough to meet emissions targets is not feasible, making conversions a key lever for cutting greenhouse gases from ships already on the water.
"LNG delivers the strongest and earliest financial return, while ammonia and bio-methanol deliver substantially deeper emissions reductions but require longer payback periods," WinGD said.
Ammonia and bio-methanol, however, offer greater emissions savings than LNG. The LNG-to-low-GHG-LNG pathway carried an estimated payback period of six years.
According to the report, bringing the various fuel pathways down to a five-year payback would require subsidies of $126-330 per tonne of CO2 equivalent.
"The indication is that a reward mechanism for zero or near-zero emissions fuels under IMO's Net Zero Framework would need to be of a similar level again to the US$100-380 remedial units already considered for excess emissions," WinGD said. The Net Zero Framework, adopted by the International Maritime Organization in 2025 and set to enter into force in 2028, is the global shipping regulator's mechanism for pricing greenhouse gas emissions and incentivizing zero and near-zero emission fuels.
"The important finding is that retrofit technology is increasingly not the limiting factor," said Carmelo Cartalemi, head of strategic marketing at WinGD. "The commercial outcome is determined far more by fuel price, fuel GHG intensity and the regulatory signal."
