Retrofit

Abstract

This paper firstly explains the consequences and possibilities of environmental measures in the RoRo shipping business. Next, technologies for dealing with the environmental issues are financially evaluated. Thirdly, the possible retrofitting technologies are evaluated from an aggregate viewpoint. From a private cost perspective, it is found that as long as the LNG prices are decent in combination with an acceptable distribution system, changing main engines from diesel-fuelled towards dual-fuel engines could result in a win-win solution. However, finding private investors could be a problem. Given the latter, some shipping lines may ignore the new regulation; especially since for most retrofit solutions, the private return on investment is negative. As opposed to this, the societal return is positive, hence, the question becomes how government can support the implementation of these solutions. The last part of the paper examines incentives to reduce CO2 emission for existing ships with a view to encouraging ship-owners to integrate such emission reduction into their business objectives at the least cost