# Economic Feasibility of Retrofitting an Ageing Ship to Improve the Environmental Footprint
## 1 Introduction
A study investigated the cost-effectiveness of Net Present Value (NPV) for the top 20 most frequently calling ships to Irish ports in 2019 [26]. The highest NPV is obtained for LNG, followed by methanol and green hydrogen. Green hydrogen is the best option concerning decarbonisation targets, although a further reduction in current fuel price is required to improve its cost-competitiveness over LNG and methanol. Comparative analysis is also based on in situ data [27]. The data are taken from a Cape-size bulk carrier's operation between Japan and Australia for 30 months. The findings confirm that using LNG as a marine fuel is highly creditable compared with HFO and HFO +Scrubber variants. Results from environmental assessment of alternative marine fuels, including LNG, could be found in [28; 29; 30; 31]. As a summary of these studies, the conclusion in [31] can be accepted, which reads, LNG is the main alternative to marine diesel and heavy fuel oil (MDO and HFO) and could provide a cost-effective reduction in CO\({}_{2}\) emissions whilst meeting SO\({}_{\rm x}\) and NOx emissions regulations. However, the greenhouse gas (GHG) benefit is reduced by methane slip, with an overall reduction of 8-20% compared to HFO and MDO'. This conclusion can be confirmed by the number of retrofitted and new build ships using LNG as fuel in recent years [32]. The first new-build ship using LNG as fuel was an Offshore supply vessel in 2003 and the first retrofitted ship is an Oil/Chemical Tanker in 2011. Both ships operate in the North Sea. The life-cycle cost assessment must be considered when evaluating the use of alternative fuels, along with the environmental aspects. Although based on one example of a 1500 TEU container ship, it is concluded in [33] that, in general, LNG-fuelled ships have higher running Operational Expenses (OPEX) and lower Voyage Expenses (VOYEX). A point must be considered the loss of cargo space due to installing LNG tanks onboard. Recently conducted research [34] provides valuable information for retrofitting a 300 K DWT VLCC trading from the Arabian Gulf to China. The CAPEX as $ USD per tonne deadweight ($/t DW) of competing alternatives is shown in Table 1. \begin{table}
\begin{tabular}{c c c c} \hline \hline \multirow{2}{*}{**Items**} & **Two-Stroke LNG** & **Two-Stroke HFO and Open** & **Two-Stroke VLSFO** \\  & **Retrofit** & **Loop Scrubber** & **Conventional** \\ \hline Retrofit CAPEX, \$/t DW & 90.67 & 13.33 & 0 \\ Opportunity Cost, \$/t DW & 10.33 & 2.33 & 0 \\ CAPEX, \$/t DW & 101.00 & 15.66 & 0 \\ \hline \hline \end{tabular}
\end{table} 
Table 1: CAPEX alternatives in retrofit LNG, retrofit open loop scrubber and reference VLSFO. The opportunity cost is a conservative estimation of the lost charter hire during the 91 day conversion to LNG. The analysis concludes that retrofitting LNG as a marine fuel delivers strong investment returns over the remaining ten years of the VLCC, with returns dependent on relative fuel prices of LNG, HFO and VLSFO. This study introduced the so-called 'Readers' Choice' plot, a drawing for which the reader can select own preferred future fuel price forecasts. The CII of IMO poses a threat to many VLCC vessels, becoming a stranded asset. Conversion to LNG fuel gives good prospects for these ships. In this case, the LNG alternative maintains a superior rating of B until it slides into C in mid-2027 before finally slipping to D in 2032. The danger of the vessel overturning in a stranded asset is also analysed in [35]. The total stranded value depends on the size of the LNG fleet and the transition to SZEF. Getting to Zero Coalition plans are for 5% set by 2030. LNG ships must be able to switch to these alternative fuels; otherwise, they will lose their value and the total amount will be more significant if the switch is delayed, for example, in 2034.