Natural gas is cheaper than fuel on an energy basis, making it an alternative ship fuel which leads to a reduced operating cost and clean gas environmental conditions. The current study analyses the retrofit of an ageing multi-purpose ship to use liquefied natural gas as a primary ship fuel in the context of a short-ship sea operation. The objective is to transform an existing commercial ageing ship propulsion system into a green energy propulsion one and to analyse the economic feasibility considering the high volatility and increased LNG price. Four scenarios were analysed based on the net present value representing Denying, Disinterested, Good and Acceptable financial cash outflow. It was concluded that in the present economic instability and price of LNG fuel and CO₂ taxes, the ship owner needs to rely on the long-term contract of buying LNG fuel to implement measures to reduce greenhouse gas emissions and keep good benefits in shipping.

A formulation is presented for the assessment of the CO₂ generated by ships in operation and their evolution with time, conditional on the current legislation using Markov chains. Any potential deep repair or retrofitting of the ship propulsion system or enhancement of route operational characteristics during the service life are not accounted for. The Markov transition matrix is defined based on the ship operations and CO₂ history of A, B, C, D, and E carbon intensity indicator (CII) rates. The transition between different CII rate states in the survey data is used to estimate the probability of transition of the analysed ships between different CII grates. Distinct transition matrices employing the progressively tightened legislation of CII are employed and analysed. In addition, the transition matrices can be fed into risk-based models that take the CII rates as input for defining the most appropriate ship energy efficiency management plan.