GHG Regulatory

Developments –
A case for Methanol Retrofit?

Sobhith K H
Global Newbuild Support Manager | Gas Technology Specialist
GHG Emissions Reduction
Initial IMO strategy on reduction of maritime GHG emissions, 2018
2030 2050
InitialCarbon
IMOIntensity–
strategy40% on reduction of maritime GHG emissions, 2018 Carbon Intensity – 70% Reduction
Reduction GHG Emissions – 50% Reduction

Technical - Design Indices (EEDI, EEXI) | Operational – Carbon Intensity Indicator (CII)

MEPC 80, Revised IMO strategy on reduction of maritime GHG emissions, 2023

2030 2040 2050

• Carbon Intensity – 40% • GHG Emissions – at least 70% • GHG Emissions – reach net-zero
reduction reduction (striving for 80%)
• GHG Emissions – at least 20%
reduction (striving for 30%)
• Zero Carbon fuels – at least 5%
of energy mix (striving for 10%)

Technical Measures? Operational Measures? GHG Emissions Pricing Mechanisms?

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EU ETS Emissions Trading - Pay for operational GHG emissions
EU EU-ETS Compliance - Estimated Cost
port
B Suezmax - € 1,138,510 (Yr 2026 -100%)
100% of TtW
non EU CO2 EU non
EU port emissions**
port EEA
port 50% of TtW
CO2 A C
50% of TtW
CO2
port
emissions** emissions**

• EU ETS – Cap and Trade

• Polluter pays for Tank-to-wake operational CO2 emissions (CH4 & N2O in MRV Based on 2021 MRV Data
from ‘24, in ETS from ‘26)
Vessel Type Route (Round Voyage) $/day Cost
• Phase in from 1 January 2024** (2024 40%, 2025 70%, 2026 100%)
VLCC Bonny-Rotterdam 9,029
• Flag neutral
Suezmax Houston-Rotterdam 5,882
• ETS Payments - ETS costs pass-through to commercial operators; shipowners
will be entitled to get compensated
Aframax Corpus Christi-Rotterdam 5,030
**subject to finalised legislation
Source: Clarkson’s Research, Marc. 2023
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FuelEU Maritime – Lifecycle GHG emissions (WtT + TtW )
EU
Illustrative example of how green fuel is viewed under FuelEU
port
B
150 Methanol (made from natural gas)
100

WtW GHG intensity [gCO2eq/MJ]

100% of
non EU energy EU non
EU port consumed
port EEA 50

port 50% of
energy A C
50% of
energy
port 0
2020 2025 2030 2035 2040 2045 2050
consumed** consumed**
150

100
e-Methanol (renewable + recycled carbon)
• FuelEU Maritime – GHG Intensity Control
50
• Incentivizing uptake of low/zero carbon fuels
0
2020 2025 2030 2035 2040 2045 2050
• Lifecycle GHG emissions characteristics of energy (WtT + TtW GHG
compliant surplus
intensity (gCO2eq/MJ))
• Applicable from 1 January 2025
How it works FuelEU sets limit for the yearly average greenhouse
• Emissions - CO2, CH4 & NOx on a well-to-wake basis gas intensity of the energy used onboard by a ship during a
reporting period. Penalty calculated based on the extent of under-
• Onshore Power Supply - containerships and passenger ships while or over-performance against the target for the year.
moored at major EU ports from 2030
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 FuelEU Maritime – Lifecycle GHG emissions (WtT + TtW )

FuelEU Maritime – Estimated Penalties FuelEU Maritime – Estimated Penalties FuelEU Maritime – Estimated Penalties
VLCC (HFO Case) Containership – Feeder (VLSFO Case) 174K cbm LNG Carrier

FEUM (Fuel) FEUM (Fuel) FEUM (Fuel)

$9.0 $9.0 $8.0

Millions
Millions

Millions
$8.0 € 8.40 $8.0 $7.0
€ 8.21 $7.20
$7.0 $7.0
$6.0

$6.0 $6.0
$5.0
$5.0 $5.0
$4.0
$4.0 $4.0 € 4.61
€ 4.41
$3.0
$3.0 $3.0
$2.81
€ 2.66 € 2.66 $2.0
$2.0 € 2.27 $2.27 $2.0

€ 1.55 € 1.55 € 1.55 $1.0

$1.0 $1.0
€ 1.04 € 1.04 € 1.04
$- $- $- $0.45 $0.45
2025 2026 2027 2030 2033 2035 2040 2025 2026 2027 2030 2033 2035 2040 2025 $-0.90
$-0.90 2026 $-0.90
2027 2030 2033 2035 2040
$(1.0) $(1.0) $(1.0)

2025 2026 2027 2030 2033 2035 2040 2025 2026 2027 2030 2033 2035 2040 2025 2026 2027 2030 2033 2035 2040

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Pooling Illustrative Example : 2030~2034
paying 227 mil.€ less penalty, an e-methanol ship can save up to 10 VLSFO ships in a pool
Assumptions
1. To calculate the GHGIE intensity limit, 2020 reference value is set to 89.18 [gCO2eq/MJ].
2. VLSFO's well-to-wake carbon intensity is set to 91.40 [gCO2eq/MJ].
3. e-methanol's well-to-wake carbon intensity is set to 7.09 [gCO2eq/MJ].
4. In-scope fuel consumption is calculated proportionally to the in-scope CO2 emission.
5. All ships are technical sister, container ships and have identical trades, therefore the same CO2 emission throughout the years.
6. Ignoring pilot fuel, energy loss during combustion, trade pattern changes due to containment system restriction etc.

VLSFO 19k TEU Boxship Fleet x10 e-methanol Transition x10 + x1

wait & see scenario green fuel scenario

2030 : 3.8 mil.€ x 10 x 1.1 = 38 mil.€ onemil.€

2030 : 3.8 ship running
x 10 xon1.1e- = 38 mil.€

0€
2031 : 3.8 mil.€ x 10 x 1.1 = 42 mil.€ methanol will create
2031 : 3.8 mil.€ x 10 x 1.1 = 42 mil.€
enough surpluses to
2032 : 3.8 mil.€ x 10 x 1.2 = 45 mil.€ 2032 : 3.8 mil.€ x 10 x 1.2 = 45 mil.€
balance out deficits of
2033 : 3.8 mil.€ x 10 x 1.3 = 49 mil.€ 2033 : 3.8
ten mil.€
VLSFO xships
10 in
x the
1.3 = 49 mil.€
2034 : 3.8 mil.€ x 10 x 1.4 = 52 mil.€ 2034 : 3.8
samemil.€
poolxevery
10 xyear
1.4 = 52 mil.€

VLSFO / 91.4
Article 20 Penalty Multiplier: 83.83 / GHGIE target
deficit surplus
1 + (n -1)/10
where n is the number of
consecutive reporting periods for
which the company is subject to a
remedial penalty for this ship. 7.09 / e-methanol

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Retrofit to Methanol –
A possibility?

7
Demand and uptake

Approx. Container Potential retrofit demand, all vessel segments*

13,000 sector
Vessels (across ship is an early driver
segments) are potential of demand
candidates for alternative
fuel retrofits by 2036

Customer 30 confirmed
sustainability orders
goals are driving this year for container
retrofit demand – two ship conversions,
containership conversions plus options for
already this year another 45 The retrofitting period based on conversion age limits, if the
transition to zero-emission only construction begins in 2027.
(Clarksons)
* Scenario: zero-emissions newbuilds only from 2032, maximum retrofit age of 10
years, early extension of retrofit to small vessels’

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Case Vessel – 7000 TEU Container ship (LSFO)

Principal Particulars MAN 7G80ME-C10.5, Tier

III with EGRTC
Length B.P 267.0 m Main Engine Endurance 20,000 nm
NMCR 32.970 kW x 72.0
Breadth (mld.) 42.8 m rpm
Depth (mld.) 24.6 m Service
SFOC 156.2 g/kWh 21.0 knots
Speed
Design Draught 13.0 m
Fuel Tank
Container Capacity Abt. 6950 TEU 4200 m3
Capacity (LSFO) Fuel Cons. 89 t/day
MDO/MGO Tanks 600 m3
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Methanol Fuel System
Methanol Storage, Processing & Supply System

Source: MAN ES, Lloyd’s Register

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Retrofit Considerations – Fuel Storage Tanks

Structural & Stability Considerations

• Sloshing - Partial filling/continuous consumption
• Stability - Examine if vessel’s stability is impacted / limitations to loading conditions?
• Shear forces/Hogging bending moments
Location –
• Proximity to E/R, Bunkering station, Separation requirements
Materials – corrosion considerations
• Carbon steel with coating, Stainless steel (300 series austenitic)
Coatings
• Proven coatings from chemical tanker application - Zinc‐Silicate, Sigma Silguard 750
Venting - Pressure and vacuum relief valves – venting to a safe location on open deck
Cofferdam - Integral tanks

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Engine Conversion – Is there a Retrofit Package available?

MAN ES WinGD
• Any ME-C based engines feasible to convert • All X-Engines, X-DF Engines – Future Fuel Ready
• Status – No actual project in place
• Scope - Engineering Design, Installation, Acceptance test
Wartsila
Key Criteria - detailed design and factory acceptance test of
the exact variant of bore, stroke, Mk. and dot number exists? • Retrofit solution for electronically
• Yes – Optimized path to conversion controlled 2-S engines
• No – Significant work (cost implication) • Modular design

TimeLine
MAN 7G80ME-C10.5, Tier III with EGRTC
Main Engine Engineering Design 5-6 Months
MAN 7G80ME-C10.5-LGIM, Tier III with EGRTC
Component Production/Shipment 7-9 months

Installation 1-2 months

Trials 2 weeks

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Engine Retrofit
Fuel injection systems
• Methanol fuel & Pilot fuel injectors along with associated fuel piping
Auxiliary systems
• Sealing oil system, Hydraulic oil system
• Engine components – suitable materials for fuel compatibility
NOx control G80ME-LGIM Mk10.5
• Provision for after-treatment for Tier III compliance
• NOx Certification
Control System upgrade
• Combustion control – fuel injection control parameters
• Upgrading related electronic components; automation & control
• Safety Systems as per the approved safety concept

Image Source – MAN ES

13
Fuel Preparation Room

Location –
• Outside of the Engine Room/ Separate compartment
• Preferably close to ER to minimize fuel supply & return
piping length

14
7000 TEU Container ship (Methanol Fuelled)

MAN 7G80ME-C10.5, Tier III with EGRTC

20,000 nm
Main Engine MAN 7G80ME-C10.5-LGIM, Tier III with Endurance
13,000 nm
EGRTC

156.2 g/kWh (Fuel Oil)

SFOC Service Speed 21.0 knots
318.6+9.9 g/kWh (SGC+SPOC)

Fuel Tank 4200 m3 (LSFO) 89 t/day (LSFO)

Capacity 6000 m3 (Methanol) Fuel Cons. 174 t/day (Methanol)
4.5 t/day (Pilot Fuel)
MDO/MGO Tanks 600 m3
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Stena Germanica – First full scale Methanol Conversion

• Conversion of main engines (4xWartsila 8ZAL40S, 6000 kW)and testing on-

board
• Risk Assessments (HAZID, HAZOP) by LR
• Engine – HP common rail system, engine control system
• Fuel Bunkering – Manifold, safety systems
• Fuel Storage – DB tank with coating (500 cbm)
• Fuel Processing – High pressure pumps (4x)
Courtesy – Stena line
• Others - Double walled piping, IG System, Gas detection

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Conversion Costs – CAPEX for retrofit conversion
CAPEX investments for conversion of 15000 TEU
• Propulsion Machinery – Main Engine, Auxiliary Engines container vessel from fuel oil to methanol-fuel –
(newbuild price $150M (assumed))
• Fuel Tank –
• Fabrication
• Coating
• Auxiliary Equipment
• Fuel Supply systems
• Control & Safety Systems
• Fire protection, detection, fighting
• Shipyard costs

Source: PREPARING CONTAINER VESSEL FOR CONVERSION TO GREEN FUELS,

Oct. 2022
Maersk McKinney Moller Center for Zero Carbon Shipping

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Summary
Considerations
Regulatory Uncertainty
Safety/Handling challenges
Technology development
Relatively low experience
related to retrofitting
Limited physical capacity of
yards for retrofitting
Financial Aspects
High CAPEX investment for
the first retrofit
Retrofitting requiring off-hire
periods
Decision – Cost benefit
analysis retrofitting existing
vessels Vs Newbuild
What Next?
Retrofitting offers possibility
to remain flexible on the
Decarbonisation transition
pathway
Feasibility analysis and
Planning is the key to
success
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Further Reference

Knowledge Hub

https://www.lr.org/en/knowledge/?curre
ntPage=1&sortBy=1

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Thank You
Sobhith. K.H
Global Newbuild Support Manager | Gas Technology Specialist
T +65 3163 0689 M +65 8355 5004 E sobhith.hariharan@lr.org
Lloyd’s Register Singapore Pte. Ltd., 9 North Buona Vista Drive, #02-01 The Metropolis Tower 1, Singapore 138588