As carbon rules tighten and alternative-fuel investment accelerates, owners of older ships will face a harder question: does another retrofit extend commercial life, or merely delay an inevitable recycling decision?

Hitesh Vyas, Vice President, Middle East and Green Recycling Coordinator at Wirana Shipping Corporation, examines the factors shaping this decision:

Shipping’s fuel transition is usually discussed as a technology race: which fuel will win, when supply will scale and how quickly new engines can be deployed. Yet the transition will also shape the other end of a vessel’s life. As emissions rules become progressively more demanding, fuel choice and carbon performance will increasingly determine whether an older ship remains commercially viable or is sent for responsible recycling.

The choices facing owners are becoming more complex. LNG, methanol, lower-carbon drop-in fuels and other alternatives each carry different implications for vessel design, fuel availability, tank capacity, operating costs and emissions performance. For newer ships, these considerations can be addressed during the design stage. For older vessels, the decision is more difficult because any investment must be recovered within a much shorter remaining economic life.

This will not happen as a sudden wave. The effect will be gradual, uneven and closely tied to freight markets, but it will compound. For a growing portion of the fleet, the decision to trade on will no longer depend principally on age and earnings. It will depend on whether the vessel can continue to meet regulatory, chartering and financing expectations without absorbing disproportionate capital and operating costs.

The market effect

If fuel and emissions performance are becoming so important, why has recycling supply remained relatively constrained?

The answer lies partly in geopolitics. Longer and less efficient trading patterns have increased tonne-mile demand, while the expansion of the shadow fleet has allowed many older vessels to remain gainfully employed. Higher charter rates have also given owners more room to respond. They can reduce speed, improve voyage planning or fund modifications whose cost can be recovered while earnings remain strong.

That breathing space should not be mistaken for a permanent solution. Slow steaming cannot erase a vessel’s technical limitations, while retrofits become harder to justify when a ship has little remaining life.

Carbon costs

The EU Emissions Trading System has brought carbon directly into voyage economics. It covers 100% of emissions between EU ports and 50% of emissions on voyages between EU and non-EU ports. The phase-in reaches 100% of the 2026 emissions covered at the 2027 surrender deadline, while methane and nitrous oxide are also included from 2026.

Two apparently similar ships may therefore carry materially different compliance costs. A vessel operating on conventional fuel may face a higher carbon exposure than a modern ship using a lower-emission alternative, but converting an existing vessel to LNG, methanol or another fuel can require tens of millions of dollars, depending on its design and the scope of work.

The owner must then consider fuel availability, methane slip in the case of LNG, reduced cargo capacity, time out of service and whether the investment can be recovered before the vessel reaches the end of its commercial life.

The commercial test is therefore not whether a retrofit is technically possible. It is whether the retrofit produces a credible return across the vessel’s remaining economic life.

CII will affect employability

Outside Europe, the Carbon Intensity Indicator is steadily tightening the link between operational efficiency and commercial access. A ship rated D for three consecutive years, or E for one year, must develop an approved corrective action plan. The required reduction against the 2019 reference line rises from 11% in 2026 to 21.5% in 2030.

Owners can respond through speed management, routing, maintenance and energy-saving technologies. But for an older vessel, the cumulative cost and loss of operating flexibility may outweigh the value of another trading year.

The consequences extend beyond regulatory paperwork. Charterers, financiers, insurers and cargo interests increasingly scrutinise environmental performance. A vessel permitted to trade may nevertheless become harder to charter, finance or insure on attractive terms.

The global framework is coming, even if the timetable moves

The IMO’s draft Net-Zero Framework points towards a global fuel-intensity standard and emissions-pricing mechanism calculated on a well-to-wake basis. Formal adoption was adjourned in October 2025, with talks scheduled to resume in 2026. The precise timetable may therefore change, but the direction of travel is clear: lifecycle emissions will increasingly carry a financial value.

That uncertainty should not encourage owners to postpone planning. They must test scenarios covering fuel prices, carbon exposure, trading patterns, retrofit cost and residual life rather than rely on a single forecast.

Some sectors will move first

Container ships and car carriers are likely to feel the transition earlier than several other segments. Their trading patterns, customer visibility and fleet-renewal programmes create stronger pressure to adopt alternative fuels and demonstrate emissions reductions.

As newer dual-fuel vessels enter service, older conventional ships may find themselves pushed towards less attractive employment before being released for recycling.

The decisive period is likely to emerge towards the end of this decade, when tighter CII requirements, regional carbon costs and the prospective global framework begin to overlap. A weaker freight market could accelerate the process by removing the earnings cushion that currently supports older tonnage.

Transition planning

Ship recycling should not be viewed as evidence that decarbonisation has failed. Properly planned and responsibly executed, it is part of fleet renewal. The danger lies in waiting until compliance costs, poor ratings or declining employment leave an owner with limited choices and little negotiating time.

Owners should assess recycling alongside retrofit and continued-operation scenarios well before a vessel reaches that point. The fuel transition will not send every older ship to the recycling yard at once. It will, however, steadily redraw the boundary between assets worth upgrading and those whose steel, equipment and materials can contribute more through safe and environmentally sound recycling.

Photo credit: Wirana Shipping
Published: 3 September, 2026

Singapore-licensed LNG bunker supplier FueLNG on Friday (28 August) announced a seminar to mark the elevation of the LNG bunkering Technical Reference (TR 56) to the newly published Singapore Standard SS 727 – LNG Bunkering.

FueLNG said the launch of SS 727 represents a significant achievement for Singapore’s maritime industry, providing a comprehensive and robust framework to enhance the safety, consistency, and reliability of LNG bunkering operations. 

“The standard captures years of industry experience, technological advancements and operational learnings, reinforcing Singapore’s position as a leading global LNG bunkering hub,” the company said.

Manifold Times previously reported MPA announcing that the existing TR56 would be upgraded into a Singapore Standard in August 2026 to further strengthen safe and reliable LNG bunkering operations. 

MPA said this in conjunction with announcing the issuance of eight new licences to supply LNG as a marine fuel in Singapore from 1 September.

The licences were awarded to Aramco Trading Singapore, Equatorial Marine Fuel Management Services, ExxonMobil Asia Pacific, PetroChina International (Singapore), Shell Eastern Trading, Sinopec Fuel Oil (Singapore), TotalEnergies Gas & Power Asia (TEGPA)-Sembcorp Fuels (Singapore) Joint Venture, and Vitol Bunkers (S).

A highlight of the seminar was the presentation by Dr. Saunak Rai, Chairman of the Technical Committee for Bunkering (Cryogenic & Gaseous Fuels) and General Manager of FueLNG, who led the industry effort to develop the standard. 

In his address, Dr Rai shared the evolution of LNG bunkering standards in Singapore, tracing the journey from the early development of TR 56 to its elevation as Singapore Standard SS 727. 

He also provided insights into the collaboration between industry stakeholders, regulators and technical experts that shaped the standard, while recognising and thanking the Technical Committee and Working Group members whose dedication and expertise made this milestone possible.

The seminar also featured practical operational perspectives from Siah Poh Chiang, Operations Manager, FueLNG, who shared valuable lessons from FueLNG’s experience in conducting safe and efficient truck-to-ship LNG bunkering operations using the standards, further demonstrating how industry best practices have contributed to the development of the new standard.

The seminar concluded with a panel discussion on the Future of LNG Bunkering, moderated by Dr Saunak Rai. The session brought together a distinguished panel comprising Mark Nicdao of Shell, Zhanming Yang of Equatorial Marine Fuel Management Services, Michael Newman of Fearnleys Asia (Singapore and Richard Tan of TotalEnergies Gas & Power Asia. 

The panellists shared perspectives on the evolving LNG bunkering landscape, market outlook, regulatory developments, operational challenges, and the role of LNG in supporting the maritime industry’s transition towards lower-carbon fuels. 

“The exchange of views and audience engagement underscored the importance of collaboration across the maritime value chain to accelerate the adoption of safe, reliable and sustainable bunkering solutions,” the company added. 

“As one of Singapore’s leading LNG bunkering providers, FueLNG is honored to have contributed to this important industry milestone through both operational experience and technical leadership.”

Note: SS 727 is now available through the Singapore Standards e-shop here.

Related: Singapore: Equatorial Marine Fuel among eight selected for new LNG bunkering licences

Photo credit: FueLNG
Published: 2 September, 2026

Avenir LNG on Tuesday (1 September) announced the completion of the transaction first announced in March, establishing Avenir LNG as a 50/50 joint venture between NYK Line and Stolt-Nielsen.

The partnership brings together the global reach, expertise and capabilities of two leading maritime groups, providing an even stronger platform from which Avenir can continue to grow.

“For Avenir, our focus remains clear: expanding our global LNG bunkering and small-scale LNG activities, accelerating the adoption of Bio-LNG, and helping our customers navigate the transition towards lower-carbon shipping,” the company said. 

“We are incredibly proud of what the Avenir team has built to date and excited about what this new partnership makes possible.”

With the completion of the transaction, NYK said it has established a joint ownership and operating structure with Stolt-Nielsen for Avenir LNG, an operator in the LNG bunkering sector with one of the world’s largest fleets of LNG bunker vessels.

“The joint venture will pursue opportunities in LNG and bio-LNG bunkering, supporting the maritime industry’s transition to lower-emission fuels,” NYK said in a separate statement. 

Photo credit: Avenir LNG
Published: 2 September, 2026