Ship Retrofit Market Size, Share, Growth, and Industry Analysis, By Type (Energy Efficiency Retrofit, Emission Control Retrofit), By Application (Commercial Vessels, Naval Ships, Passenger Ships), and Regional Forecast to 2034

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SHIP RETROFIT MARKET OVERVIEW

The global ship retrofit market size is estimated at USD 5.24 billion in 2025 and expected to rise to USD 8.22 billion by 2034, experiencing a CAGR of 5.14%.

The retrofit space for ships is considered upgrades to existing ship technologies/systems, which would be in the form of upgrades to enhance the performance efficiency of the ship and decrease the impact on the environment. Some of these upgrades may be energy-efficient engines, hull alterations, navigational systems, and technologies that are emission-neutralizing devices, such as scrubbers or ballast water treatment systems. There have also been significant international regulatory influences impacting shipowners/operators, coupled with the environmental movement, to create an environment for shipowners/operators to not view retrofits as a way to save money, to extend that ship's service until purchasing a new ship becomes necessary. Investment in technologies around green propulsion, fuel management, and digital systems is furthering a shipowner/operator's decision to consider broader retrofitting initiatives. Commercial vessels, naval fleets, and passenger ships are all being transformed as industry participants in reducing emissions, reducing operational costs, and prolonging the life of their fleet. So, as global trade and demand for sustainable maritime activities go forward, ship retrofit is trending, and gives ship operators the ability to remain competitive and aligned with regulations as they change over time. The challenges they face still are high ship retrofit costs, downtime through the retrofit, and skilled labour and intrastate. The market for ship retrofit is only likely to increase steadily, with clear sustainability objectives being combined with sustainable modernization of the maritime industry.

KEY FINDINGS

• Market Size and Growth: The global ship retrofit market size is estimated at USD 5.24 billion in 2025 and expected to rise to USD 8.22 billion by 2034, experiencing a CAGR of 5.14%.

• Key Market Driver: More than 70% of existing commercial vessels have undergone retrofit activities in 2023 to meet the International Maritime Organization's (IMO) 2020 sulfur emissions regulations.

• Major Market Restraint: High upfront costs and extended downtime while in retrofit projects prevent retrofit projects by smaller shipping companies. 40% of surveyed vessel owners stated that limited financial resources prevent them from entering retrofit projects

• Emerging Trends: Use of energy-efficient technologies, such as scrubbers and ballast water treatment systems (BWTS), increased for retrofits by 35% in 2023.

• Regional Leadership: The Asia-Pacific (APAC) region leads in the retrofit market with shipyards in China, South Korea, and Japan completing more than 60% of the global volume of retrofit operations.

• Competitive Landscape: Notable players such as Damen Shipyards and Samsung Heavy Industries leverage a modular approach to retrofit projects to achieve reduced vessel downtime.

• Market Segmentation: Retrofit demand for passenger and container vessels accounts for more than 50% of all retrofit demand for vessels due to safety and environmental requirements.

• Recent development: Adoption of digital twin technology for planning ship retrofit and conversion projects increased by 20% in 2024 to improve accuracy and diminish costs for vessel owners.

COVID-19 IMPACT

COVID-19 Impact on the Ship Retrofit Market

The COVID-19 pandemic greatly impacted the ship retrofitting market by creating challenges with operational logistics and supply chains. The global shutdowns and border closures stalled the delivery of retrofitting components. Also, when shipyards closed, and labour had to be restricted or limited, there were delays in retrofitting. While it was economically uncertain and the shipping market declined in both cruise and passenger sectors, many shipowners chose to pause or delay proceeding with planned upgrades. Implementing health and safety protocols made work aboard under productive delays cumbersome and time-consuming, which raised operational costs. Although some operators were able to take advantage of downtime to conduct essential upgraded compliance retrofitting, or turned to the option of remote and distance monitoring solutions, the impact of COVID-19 slowed retrofitting activity, reduced investment, and temporarily pushed the growth curve of the market backwards.

LATEST TREND

Sustainable and Smart Technologies Driving Growth in the Ship Retrofit Market

One of the two key intersection characteristics that has contributed to the explosive growth of the ship retrofitting market is the convergence of sustainability and intelligence. With environmental regulations tightening, ship owners are continuing to invest in upgrades for energy efficiency, such as hybrid propulsion systems, exhaust gas cleaning technologies, hull optimization packages, etc. Digitalization - enabled by technology such as AI-driven engine monitoring, IoT sensors, complex data analytics, etc. - is also impacting how vessels are operated and maintained. These two angles and examples of retrofitting are jointly used to reduce fuel usage, emissions, and operational performance status. Added to the increased rationalization of retrofitting, with modular retrofitting, prefabrications, etc., installations are happening quicker, and also cheaper than before. Collectively, these changes are motivating not just the actions of ship owners to responsibly work toward nationally and globally-compliant environmental operations, but they are also enabling vessels to operate better for longer, and at the same time incrementally revolutionize the retrofitting sector so that it can become a viable option for ship operators.

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SHIP RETROFIT MARKET SEGMENTATION

Based On Types

• Energy Efficiency Retrofit: This category describes upgrading ships to consume less fuel and operate more efficiently. Fuel-efficient modifications might include hull optimization or upgrades to the ship's propeller that could improve performance, and they also encompass energy-saving devices and the implementation of hybrid/electric propulsion arrangements. The aforementioned activities will help reduce your operating expenses as well as enhance a ship's environmental performance over a period determined by subsequent relevant condition factors.

• Emission Control Retrofit: This engineer may be involved in installing conditioning methodologies of technology so ships can comply with global emissions regulations like IMO 2020. These upgrades may include scrubber systems for the removal of sulfur oxides, ballast water treatment systems, and NOx reduction technology. All emission retrofits/technologies are needed for compliance and to reduce the environmental cost of maritime activity.

Based On Applications

• Commercial Vessels: This segment includes retrofits made on cargo ships, tankers, and container vessels, and performed mainly for energy efficiency measures, in order to comply with the latest environmental regulations. Upgrades and modifications can involve the installation of scrubbers, eco-efficient or energy-saving devices, and digital monitoring equipment, and can be regarded as improvements on the vessel's efficiency performance & reducing the longer-term costs of fuel & energy consumption.

• Naval Ships: The retrofit of a naval vessel will lend itself to an extended service life, improved combat readiness, and upgraded navigation or defense systems. In addition, upgrades will also make room for energy-efficient alternatives and some emission reduction devices or systems that would comply with government mandates for sustainability and environmental obligations.

• Passenger Ships: The passenger ship segment encompasses cruise ships and ferries, where retrofits will have environmental considerations, as well as other onboard systems with regard to improving safety and comfort for passengers. Consistent retrofits include low-emission engines, stationary and on-board heavy commercial HVAC systems, and waste management technology, which meets the passengers' expectations and enables compliance with various environmental obligations.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Greater Environmental Regulations and Sustainability Objectives Drives Growth

Among the top bounds for Ship Retrofit Market Growth is the increased pressure from global regulations that are forcing down the environmental cost of maritime operations. Whether it’s an international cap such as IMO 2020 or simply the push for shipowners to install exhaust gas cleaning systems (scrubbers) and ballast water treatment systems, shipowners at all levels have legitimate concerns about the leftover environmental impact. Additionally, with the global escalation of climate change—many shipping companies (shipping is inherently fraught with moral hazard) are developing their internal green policies beyond regulations, and the retrofit option for compliance suggests the ownership of a retrofit can be designated as the least destructive and most cost-effective path to compliance without needing a newbuild. Not only do these modifications work toward emissions reduction goals, but they are also consistent with the push for sustainable and environmental forms of shipping in every context.

Cost Saving and Higher Operational Performance Fuels Demand

Another major element contributing to the Ship Retrofit Market Growth is the desire for better fuel efficiency and operational performance. The need for fuel-saving energy-efficient and operational upgrades and modifications, align with the client’s desire for fuel and operational cost reductions, therefore, shipowners' ability to invest in energy-efficiency and operational upgrades—such as optimized hull forms, hybrid power and propulsion options, and digital monitoring solutions—will allow shipowners to reduce significant high-value capital and ongoing fuel and maintenance costs to attract new and existing clients. Given that fuel accounts for a large percentage of traditional shipping expenditures (for example, for shipping and operational efficiency costs via measures should reduce operational burn-off while extending a modern vessel’s operational life and/or competitive lifespan)—the potential overall savings generated by digital solutions, modified hulls and sustainable designs etc will prompt more vessels to update towards retrofitting over traditional replace.

Restraining Factor

High Initial Investment and Retrofit Installation Costs Hinders Growth

The high initial cost associated with retrofitting ships is a significant barrier to accepting retrofits as a serious opportunity in the Ship Retrofit Market Growth. Upgrades incorporating a scrubber system, ballast water treatment units, hybrid technologies (for propulsion), and digital monitoring tools can be very expensive, with modifications to structural procurements for older ships, etc. Beyond monetarily expensive installations, there is the continuous cost associated with maintaining, providing crew with specialized training, and complying with the safety and environmental regulations that come with leading technological advances. For small shipping companies or operators with limited resources, these monetary commitments can prohibit the adoption of retrofits. Even larger operators have to consider return on investment against continued financial uncertainty and volatility, with long-term fluctuating freight and cost of fuel rates included. The need to replace and further invest in the newest technology, among other requirements that stay relevant to regulation, only compounds the overall cost of operation, further extending the resulting slope of any retrofit for the industry.

Integration of AI and Smart Monitoring Technologies Creates Opportunities

Opportunity

The Ship Retrofit Market has a remarkable opportunity for development via artificial intelligence and enhanced monitoring systems. Artificial intelligence provides ship operators the advantage of fuel optimization, predictive maintenance, and improved route planning, ultimately creating more efficient time and cost with operations. Systems that leverage AI can gather real-time data from sensors and identify problems well in advance, reducing downtime and improving overall vessel performance. In addition, the "smart" technology can help with regulatory compliance of emissions by automating systems to control emissions. As demand for intelligence and environmentally-friendly solutions continues to rise, it will benefit companies that invest in AI-backed retrofits to improve efficiency and assist with profitability opportunities. With the maritime industry transitioning to automation and digital transitioning, the current early adopters will be well positioned for a competitive advantage, which in the coming years will reflect in both the Ship Retrofit Market and ultimately the Ship Retrofit Market Share.

Safety, Compliance, and Operational Complexity are Challenges

Challenge

If demand for retrofitting is increasing, the safety and full regulatory compliance of naval retrofits is a formidable challenge and a long-term issue present in the Ship Retrofit Market. Retrofits typically involve significant changes in a small, confined space that expose the workforce to safety issues and introduce operational runtime risk. The shipowner is responsible for ensuring that the operations involved in the retrofit and all safety issues relating to relevant international maritime safety and environmental obligations defined by many distinct IFOs, regional regulations, and vessel-specific regulatory frameworks are compliant. When you add coordination and logistical schedules with the shipyards, downtime considerations, service schedule extensions, and operational impact, the issues deepen quickly! Any failure of safety or compliance can result in downtime and operational delays, financial penalties, or technical failures, if not worse. Balancing smoothly operating and at the same time, completing an effective retrofit that can be proven to comply with internationally accepted safety and performance criteria, is very difficult. It is a complex combination of sequential planning, skill/labour, review, and it represents an all-consuming obstacle for operators trying to harness performance-based retrofits and maintain reliability and trust.

SHIP RETROFIT MARKET REGIONAL INSIGHTS

• North America

With expectations for greater emissions regulations to come into effect, North America is a key player in the international ship retrofit market primarily due to regulatory oversight, innovation in maritime systems, and a large commercial shipping fleet. The United States Ship Retrofit Market is extremely strong due to a heavy emphasis on resourcing naval vessels and coast guard support vessels, and the need to comply with emissions regulations such as MARPOL Annex VI. Shipowners in the United States are also investing considerable capital in energy-efficient retrofits and emissions control systems to comply with the United States' and International regulations at the same time. Furthermore, North America benefits from superior shipyard infrastructure, government investment support, and increased emphasis on digitalization in the maritime industry. Together, these factors are supporting continued growth and innovation in North America's ship retrofit market.

• Europe

Europe is a key component of the growth of the Ship Retrofit Market on a global scale, due to its environmental regulations and technological background in sustainability for vessels. Over time, Europe has aggressively adopted tough emission standards via the European Union's Green Deal and within the IMO framework, which has facilitated the good usage of retrofit solutions amongst commercial and passenger vessels. Germany, Norway, and the Netherlands are all investing in energy-efficient systems, hybrid propulsion, and emission control devices. For vessel operators, Europe remains a heavyweight in shipbuilding and retrofitting expertise and facilities, and is closely followed by passionate shipbuilders and maritime professionals. The confluence of all these factors enhances operational profitability but also leads to a continual evolution of best retrofitting practices that position Europe as the leader in the world of 'sustainable retrofitting'.

• Asia

Asia is becoming one of the quickest growing areas in the Ship Retrofit Market, driven by ongoing commercial fleet expansion, increased awareness of greening vessels, and competitive cost of services in shipyards. Countries such as China, Japan, and South Korea are important players in this area with significant shipbuilding capacities and a growing awareness of the need to meet global emission requirements. Asia's competitive labour rates, as well as existing amenities for marine repair and refits, favour a region of large, or multiple, projects from some of the world's largest commercial fleets. China’s reputation for rapid growth in scrubber installations, as well as digital retrofit offerings, has made the need for enhanced fuel efficiency a focus. Japan and South Korea have increasingly been developing smart and environmentally friendly retrofitting technologies. Despite the past few years of shipping activity in the Asia-Pacific region, as activity increases, energy and emission retrofitting activity will also be expected to increase, creating a positive effect and amplifying Asia’s role as a driver of the Ship Retrofit Market Growth.

KEY INDUSTRY PLAYERS

Strong Strategies Boost Survival and Growth Amid Fierce Competition Among Key Competitors Globally

The Ship Retrofit Market is crowded with both global and regional competitors attempting to innovate, push sustainability, and increase performance. Many companies are focused on retrofitting technologies new and advanced retrofitted technologies that reduce emissions and increase energy efficiency, while achieving regulatory compliance. Leading companies like Wärtsilä, Silverstream Technologies, and Becker Marine Systems have focused their offerings on emission control technologies and energy savings for shipping operators to allow their operators to manage legacy fleets which may face strict environmental challenges. Other companies such as Eco Marine Power and Blue Wasp Marine focus their efforts on optimizing hydrodynamics and integrating renewable aspects of the fuel mix, indicating the paradigm shift to more sustainability retrofitting efforts.

A newer aspect of the market is digitalization, where companies such as Navisense and Eniram offer performance monitoring capabilities and smart analytics that inform operators of ways to optimize fuel consumption or other aspects of vessel performance. Other companies, like Norsepower, which manufactures wind-assisted propulsion systems, enhance sustainability in their design solutions. The market depends on the ability of maritime engineers, shipbuilders, and, consequently, technology developers to work collectively with retrofit industry innovators. There will be collective opportunities to develop new retrofit solutions, especially as flags receive further regulatory scrutiny and become less accepting of non-environmentally friendly approaches. Due to their innovation, it is expected that the companies in the Ship Retrofit Market are poised to shape the market and its development through their knowledge of the existing retrofits and their innovation, flexibility, and consideration of the future of shipping and ship operations.

List of Top Ship Retrofit Companies

• Fisk Tech (Italy)
• Norsepower (Finland)
• Silverstream Technologies (U.K.)
• Navisense (Norway)
• Eco Marine Power (Japan)
• Martechnic (Germany)
• Eniram (Finland)
• Blue Wasp Marine (Netherlands)
• Wärtsilä (Finland)
• Becker Marine Systems (Germany)

KEY INDUSTRY DEVELOPMENTS

April 2025 – These vessels are well-known, large-scale, flexible designs built in Korea and represent the largest successful air lubrication system retrofit we have managed to date, retrofitting a series of LNG carriers owned by one of Europe’s biggest shipping companies. The retrofit was done at Singapore's biggest shipyard, and we are estimating fuel saving of up to 10% over the fleet. A true win for customers and for us, and just one of a series of retrofits that is quickly gaining acceptance, and the growth we are seeing in the retrofit sector for fuel saving technologies adds to the feeling of progress in the maritime sector towards greener ship operations.

REPORT COVERAGE

The Ship Retrofit Market is emerging as a segment that is steadily underway due in part to technological change, stricter environmental legislation, and a global investment landscape in sustainable maritime activities. International shipping companies are also attempting to meet International Maritime Organization (IMO) decarbonization goals, enhancing environmental, social, and corporate governance (ESG), with retrofit solutions such as energy-efficient propulsion, air lubrication systems, and emissions control systems gaining traction. Well-established firms like Wärtsilä, Silverstream Technologies, and Norsepower are responding by providing scalable and cost-effective retrofitting systems that reduce fuel consumption and emissions. Regions in the United States Ship Retrofit Market, and Europe, are advancing due to strong regulatory regimes and access to high-tech retrofitting facilities; meanwhile, retrofitting is increasing in other large shipbuilding regions in Asia. Challenges remain, such as anticipation of high legacy costs, work stoppage from retrofitting systems, and often limited skilled labour from region to region; meanwhile, opportunities are expanding with additional digital technology leveraging AI or other optimization tools, and also further renewable energy systems on board vessels. As global trade rebounds and fleets prepare for a decarbonized future, the ship retrofit market will continue to burgeon steadily, combining engineering innovation, environmental legislation, and economic demand to redefine how vessels perform.