Shipowners: act now to beat the retrofit rush, warns ABS

Rostom Merzouki, VP of Sustainability at class society American Bureau of Shipping (ABS), told audiences at an ABS conference last week that carbon emissions had “stopped being an externality”, and that efficiency retrofits would be integral to shipping’s business model between now and 2050. “Decarbonisation sat alongside the business – now it sits inside the business,” Merzouki said. “Waiting for the winning fuel is no longer a strategy. Economic complexity is now the operating condition.”

Carbon is now a material cost, he declared, and its intensity is financially significant. The introduction of FuelEU Maritime means carbon is now a recurring operating expense, he added.

Merzouki advised shipowners to drydock their vessels as soon as possible, suggesting that only companies “that act in 2027 and 2028” would succeed in beating the rush. Yard capacity would be constrained as more shipowners were driven to retrofit their vessels, with “shipyard space, skilled labour, and engineering expertise … becoming scarce resources” toward the end of the decade. These, he said, would come to “matter more than capital itself”.

“Owners should be asking which vessels justify retrofit investment, which should be replaced and which should be retained. Are we embracing the digital and AI capabilities that will define our competitiveness? Fuel efficiency remains the most resilient investment available today, creating value regardless of whether a green premium ever arrives, regardless of which fuel wins,” Merzouki concluded.