Shipowners are holding back on engine retrofit decisions despite growing technical readiness, as uncertainty around decarbonisation rules continues to cloud investment plans. That’s the key takeaway from British class society Lloyd’s Register’s latest engine retrofit report, which points to a widening gap between capability and commitment across the sector. While 2025 saw only limited growth in announced retrofit projects, LR said progress behind the scenes has been significant, with engine makers and yards building up the tools, partnerships and capacity needed for a future conversion wave. The main brake remains regulation. Doubts over a global framework to price emissions and incentivise low- and zero-carbon fuels — following delays at the IMO — are making owners cautious about committing to expensive conversions that require long yard stays and upfront capital. LR warned that the longer decisions are delayed, the greater the risk of a bottleneck later this decade, as more conventionally fuelled ships will need retrofitting within a tighter window to meet 2050 targets. “Owners are preparing, but not fully committing,” the class society said, pointing to the need for a clear regulatory signal to unlock large-scale investment. Despite the slow pace of orders, several high-profile projects have moved the market forward. A methanol retrofit on the COSCO Shipping Libra has shown the technology works on large two-stroke engines, marking a shift from proof of concept to something closer to repeatable solutions. Engine makers including Everllence, Wärtsilä and WinGD have also expanded retrofit offerings across methanol, LNG and ethanol, while partnerships with yards are starting to standardise installation work and reduce complexity. LNG remains in the mix as a lower-cost transition option, backed by established infrastructure and the potential to shift towards bioLNG or synthetic fuels. Meanwhile, ethanol is gaining traction after trials showed it can be blended with methanol and marine fuel without impacting engine performance, opening the door to more flexible fuel strategies. In the near term, owners are opting for so-called “bridge” retrofits — upgrades to engines, propulsion and control systems that cut emissions and improve efficiency without locking in a specific fuel pathway. These projects also compete for yard space and engineering resources, adding another layer of complexity to future conversion planning. LR said the long-term direction is clear, even if the timing is not and that a sizeable retrofit market is coming, driven by the need to decarbonise the existing fleet. The risk for late movers is that once regulation tightens, demand could surge all at once — pushing up costs, stretching yard capacity and leaving some owners scrambling to catch up. Mark Penfold, global head of technology – engineering at Lloyd’s Register, said: “A clear and consistent regulatory signal is the single biggest factor that will unlock investment at scale. Without that, the industry will continue to prepare—but not fully commit. “Regardless of the timing of regulation, a substantial retrofit market is inevitable. As the existing fleet remains central to global trade, the ability to convert vessels efficiently will be critical to meeting decarbonisation targets.” googletag.cmd.push(function() { googletag.display('div-gpt-ad-1_95_0_1_2'); });