Retrofitting existing vessels to run on alternative fuels could help ship operators reach net-zero emissions cost-effectively, but further policy support is needed to strengthen the business case and ensure maritime decarbonisation targets are met, according to the latest Fuel Economics Report published by Swiss marine power company WinGD.

The stakes extend beyond individual balance sheets. International shipping carries roughly 80-90% of global trade and accounts for around 3% of global greenhouse gas emissions, and the IMO's 2023 revised greenhouse gas strategy targets net-zero emissions from international shipping by or around 2050. Because vessels typically operate for 25-30 years, decarbonising the existing fleet — not just newbuilds — is widely regarded as essential to meeting that timeline.

While engine technology capable of decarbonising existing vessels is increasingly available, the remaining challenge lies in aligning fuel economics and regulation with targeted emissions reductions.

The report models a 16,000 TEU container vessel converted in 2030 to use alternative fuels via WinGD's high-pressure dual-fuel engines for LNG (X-DF-HP), methanol (X-DF-M) and ammonia (X-DF-A). Core costs — including conversion investment, fuel, and carbon costs — were modelled under a global pricing regime similar to the IMO's Net Zero Framework as drafted. That framework, adopted in principle in 2025, would introduce a global fuel greenhouse gas standard and pricing mechanism for shipping, though its final design remains under negotiation.

Under the assumptions modelled, all three retrofit pathways outperform continued VLSFO operation over the vessel's lifetime on both costs and emissions reduction. LNG delivers the strongest and earliest financial return, while ammonia and bio-methanol deliver substantially deeper emissions reductions but require longer payback periods.

WinGD Head of Strategic Marketing Carmelo Cartalemi said: "The important finding is that retrofit technology is increasingly not the limiting factor. The commercial outcome is determined far more by fuel price, fuel GHG intensity and the regulatory signal. Shipowners and operators need visibility not only on what a retrofit costs, but on what every ton of fuel will cost and how its emissions will be treated by regulations over the vessel's remaining life."

Beyond calculating net present value (future returns valued at today's currency minus investment cost), the report also shows potential payback periods for a retrofit and the level of subsidy that would allow a payback within five years. As an example, the best-performing pathway — LNG to low-GHG LNG — would pay for itself in six years.

The level of subsidy needed to deliver a five-year payback for these fuels is between US$126-330 per tonne of CO2-equivalent emissions. The indication is that a reward mechanism for zero or near-zero emissions fuels under the IMO's Net Zero Framework would need to be at a similar level to the US$100-380 remedial units already considered for excess emissions.

A further finding is that retrofit CAPEX itself is not the dominant factor in the business case. Across the scenarios modelled, fuel cost and regulatory treatment have a much greater influence on lifetime economics than the difference in conversion investment.

Cartalemi concluded: "The valuable insight for operators is that cost-effective options for retrofitting already exist, although the case is far from settled. For regulators, the modelling shows that without strong policy, the most cost-effective options are unlikely to include the fuels that contribute most to shipping's decarbonisation trajectory."

The Alternative Fuel Retrofits study is the latest in a series of Fuel Economics Reports published by WinGD. The first report in the series showed a potential pathway to cost-effective green ammonia uptake, using real bunkering prices and lifecycle emissions analysis from fuel supplier Envision Energy. The series aims to provide ship operators with data, insight and methodologies to evaluate decarbonisation investments, and forms part of WinGD's commitment to support shipping's energy transition whichever fuels operators choose.

Source: WinGD via Hellenic Shipping News, 01/09/2026.