The report, Applying Onboard Carbon Capture & Storage to Existing Ships, comes as shipowners face increasing pressure to decarbonize and reduce CO2 emissions. Only around 4% of the near-zero GHG emission fuel production capacity needed by 2030 has reached final investment decision. Alternative fuel-capable vessel orders have also fallen from 45% of contracted tonnage in 2024 to 37% in 2025.
Against this backdrop, the report argues that much of the fleet on order or in service today will continue to rely on conventional petroleum fuels well into the 2030s. For these vessels, oCCS offers an additional route to reducing CO2 emissions alongside alternative fuels and energy efficiency technologies.
The research finds that specific oCCS technologies have moved beyond the concept stage and are entering commercial deployment. Current full-scale installations are capturing 30–40% of CO2 emissions, while larger pilots are targeting capture rates of around 70%.
LR’s analysis identifies oCCS as a viable retrofit for a specific fleet segment: vessels with more than 10 years of trading life remaining, significant exposure to carbon pricing, access to a credible CO2 offloading chain, and sufficient onboard space for capture equipment without unacceptable commercial penalties. For these ships, the technology could help extend commercial competitiveness as environmental regulations tighten and carbon costs increase.
The report identifies three market segments as the strongest near-term candidates for oCCS deployment: MR and chemical tankers trading on EEA routes, LNG-fuelled vessels able to harness the cryogenic cold energy released during the vaporization of LNG to cool and liquefy CO2 captured from exhaust gases, and short-sea or feeder vessels with frequent access to EEA ports and carbon pricing exposure.
Panos Mitrou, Senior Vice President of Shipping Strategy, Lloyd’s Register, said: “The reality is that much of the fleet on order or in service today will still be operating well into the 2030s and beyond. While alternative fuels remain central to shipping’s long-term decarbonization strategy, shipowners also need practical options for reducing CO2 emissions from existing vessels.
“Onboard carbon capture has the potential to become an important part of shipping’s decarbonization toolkit. For the right vessel types and trades, it offers a realistic pathway to reducing CO2 emissions and managing carbon costs while fuel supply chains, infrastructure and regulations continue to evolve.”
While the report highlights significant opportunities, it also cautions that the technology is not a universal solution. Current oCCS systems can impose fuel consumption penalties of between 15% and 30% in many current applications and can require significant onboard space for capture equipment and CO2 storage. Retrofit decisions must be assessed on a vessel-by-vessel basis, taking account of trading patterns, remaining asset life, carbon pricing exposure, and access to CO2 offloading infrastructure.
The main barrier to wider deployment remains the limited availability of ports and infrastructure capable of receiving captured CO2. While major carbon storage projects are progressing in north-west Europe, including North Sea storage networks, the report identifies port reception facilities as the weakest link in the emerging carbon value chain.
The report also highlights the need for greater regulatory clarity. While the EU ETS allows captured and permanently stored CO2 to reduce compliance obligations, other frameworks, including FuelEU Maritime and future IMO regulations, are still evolving.
Looking ahead, broader deployment will depend on three key developments progressing in parallel: the outcome of FuelEU Maritime’s Article 30 review, IMO recognition of captured CO2 within a global pricing framework, and expansion of CO2 offloading infrastructure.
The report, which forms part of LR’s Retrofit Research Program, was launched at SMM in Hamburg. It is available from Lloyd’s Register at: Applying Onboard Carbon Capture and Storage to Ships | LR
