30 May 2024 (Lloyd's List) - COSCO Shipping is doubling down on methanol with its decision to convert four 16,180 teu newbuilding containerships to dual-fuel propulsion, underscoring the Chinese conglomerate’s growing bet on this alternative fuel to meet impending emissions regulations.
The retrofit of the quartet, originally ordered as conventionally powered vessels in 2021, will lead to higher costs and push back delivery. But it will expand the company’s methanol-capable fleet as the state-owned giant invests heavily in production projects and orders more dual-fuel ships across various vessel types.
The retrofit is "to meet future global green and low-carbon shipping regulations," while considering factors like conversion efficiency and cost control for vessels under construction, Cosco Shipping Holdings, its Shanghai and Hong Kong-listed subsidiary, said in a stock exchange filing.
This will incur $28.5m in additional costs per vessel, pushing the total price up to $183.5m each. Delivery will be delayed from June-December 2025 to November 2025-June 2026.
The four vessels were ordered by CSH at affiliate yard Cosco Shipping Heavy Industry (Yangzhou) in July 2021, when the two sides also signed for six 14,092 teu conventionally powered vessels.
The conversion will raise CSH's methanol dual-fuel orderbook to 16 vessels, including a dozen 24,000 teu ships ordered in October 2022 for delivery starting late 2026. This excludes retrofits of several 20,000 teu and 13,800 teu vessels already in its existing fleet.
Cosco Shipping has stepped up investment in methanol as marine fuel in recent years, amid looming global decarbonisation targets and increased uptake of this fuel by industry peers.
Beyond boxships, its dry bulk and tanker units have also ordered two 325,000 dwt very large ore carriers and two 114,000 dwt aframaxes, equipped with similar dual-fuel systems.
Additionally, the state giant agreed last September with State Power Investment Corp and Shanghai International Port Group to jointly develop a full industry chain project on methanol marine fuel.
A recent government document showed the bio-methanol plant in Jilin province invested by the trio's joint venture, Shanghai Jiyuan Green Energy, has received local regulator's approval. It will break ground in November 2026 with an annual capacity of 200,000 tonnes.
