HD Hyundai Marine Solutions and Chevron have partnered to retrofit the 160,000 cubic meter LNG carrier Asia Energy into a low-carbon ship. This initiative, led by HD Hyundai Marine Solutions, reflects the growing demand for eco-friendly ship modifications amid tightening environmental regulations by the European Union (EU). As a result, global shipping companies are increasingly turning to South Korean firms for advanced retrofitting solutions.
Among South Korean companies, HD Hyundai Marine Solutions is the only player capable of retrofitting engines among the top two ship engine manufacturers. Meanwhile, Hanwha Engine is currently exploring this market opportunity.
On Wednesday, Lloyd’s Register, the world’s largest ship inspection organization, published its Engine Retrofit Report 2025, forecasting an increase in engine retrofitting orders this year.
Industry sources report that starting this year, ships transporting over 5,000 tons of cargo or passengers docking at European Economic Area (EEA) ports will be subject to FuelEU Maritime regulations. This framework imposes fines on vessels exceeding certain carbon emission thresholds, with regulations tightening every five years.
According to the Korean Shipping Association’s guidebook, ships consuming an average of 2,280 tons of fuel annually as of 2023 will incur penalties of 804,000 euros (approximately $844,506) per vessel for using fossil fuels in the first five years. This amounts to an annual penalty of about 250 million KRW (approximately $172,500) per ship.
To avoid these costs, shipping companies are urgently retrofitting their existing vessels. While new ship deliveries typically take 2 to 3 years, engine retrofitting for dual-fuel vessels can be completed in about 4 months. Due to limited green fuel infrastructure, shipping companies prefer dual-fuel engines that run on marine diesel and eco-friendly fuels.
Only HD Hyundai Marine Solutions can perform eco-friendly engine retrofitting among South Korean shipbuilders. The company emerged from HD Hyundai Heavy Industries’ ship-related services division.
The rising demand for retrofitting is reflected in HD Hyundai Marine Solutions’ fourth-quarter performance last year. By year-end, the company’s eco-friendly retrofit order backlog reached 132 vessels, a 50% increase from 88 orders in 2022.
Hanwha Engine is currently evaluating its entry into this market. At present, they can only perform minor retrofits to enhance engine performance.
Lloyd’s Register reports that major shipping companies are prioritizing retrofits. Denmark’s Maersk, the world’s second-largest shipping company, plans to retrofit 11 vessels, and France’s CMA-General Motors, the third-largest, will retrofit 8. In contrast, China’s fourth-largest COSCO will start retrofitting 9 to methanol propulsion this year. Industry projections estimate a demand for over 13,500 retrofits by 2050 to achieve net-zero emissions.
