WinGD Report: Further Policy Needed to Meet Decarbonization Targets

The latest Fuel Economics Report published by WinGD has found that while retrofitting for alternative fuels could help ship operators reach net-zero emissions cost-effectively, further policy support is needed to strengthen the business case and ensure maritime decarbonization targets are met.

While the engine technology to decarbonize existing vessels is increasingly available, the remaining challenge is aligning fuel economics and regulation with targeted emissions reductions. The report models a 16,000 TEU container vessel being 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 then modeled under a global pricing regime similar to the IMO’s Net Zero Framework as drafted.

Under the assumptions modeled, all three retrofit pathways outperform continued VLSFO operation over the vessel lifetime on 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.

As well as 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