Newlight’s Hydrogen Retrofit Cuts Shipping Emissions Now, Offering Immediate Climate Relief

The vessel traversed from Singapore to Ghana using hydrogen and diesel.

Newlight

For 8,500 nautical miles, a 650-foot bulk carrier traversed from Singapore to Ghana utilizing a pioneering fuel blend that had never been commercially deployed on a cargo ship before. Roughly a quarter of the power driving its 10-megawatt engine came not from diesel, but from hydrogen, precisely metered by an advanced control system that determined the optimal injection levels in real time.

To avoid the Suez Canal—where Houthi attacks have turned a critical transit route into a high-risk zone and spiked war-risk insurance premiums—the vessel was rerouted around the Cape of Good Hope. This detour added two weeks to the journey and cost the owner approximately $600,000. The logistical friction highlights how vulnerability to geopolitical supply shocks and maritime bottlenecks makes fuel-hedging and alternative fuel technologies not just an environmental choice, but a crucial matter of corporate and national energy security.

Newlight, a San Francisco-based maritime energy startup, focuses on retrofitting existing diesel engines instead of waiting for the industry to transition to entirely new vessel designs. During the Singapore-to-Ghana voyage aboard a Lomar Shipping vessel, the retrofitted system demonstrated significant improvements, cutting fuel consumption by 24%, CO2 emissions by 28%, and carbon monoxide emissions by 22%. Newlight projects that these efficiency gains will save comparable ships approximately $500,000 annually, allowing the retrofit investment to pay for itself in under 18 months.

“We are building an entirely new energy layer for the diesel engines already powering the global economy, making them materially more efficient and cleaner without requiring them to be replaced,” Haran Hillel, Newlight’s co-founder and CEO, explained during an interview. “The vessel didn’t need to change how it operated. We simply gave its existing engine a way to do more, and it did so successfully across thousands of miles at sea.”

This timing is critical as the global shipping industry faces a dual challenge in its decarbonization efforts. The shipping sector moves more than 80% of global trade by volume and consumes an estimated 250 million to 300 million tons of fuel annually, at a cost exceeding $150 billion—representing the single largest operating expense for vessel operators worldwide.

The International Maritime Organization (IMO), the United Nations’ shipping regulator, has established a target of net-zero emissions by 2050, with staged intermediate reductions along the way. Crucially, the regulator’s binding carbon-pricing framework is slated for a vote among IMO member countries on December 4, which will further shape the industry’s trajectory.

On a regional level, regulatory pressure is already a legal reality. The European Union’s Emission Trading System (ETS) and FuelEU Maritime regulations, both now fully active, impose levies on ships for both their carbon emissions and diesel consumption. Newlight estimates that a vessel of the retrofitted size would otherwise face roughly $1.3 million in annual EU carbon compliance costs—representing an additional 30% on top of its standard fuel expenses.

A Retrofit, Not a Replacement

The technology itself operates as a hybrid system rather than a full replacement. A real-time controller monitors combustion data from the engine and continuously adjusts the injection of hydrogen and bunker fuel, offsetting 20% to 25% of the diesel a ship would typically burn. Newlight anticipates this share will climb to 40% or 50% as hydrogen supply infrastructure matures. The retrofit installation can be completed in just two weeks while the vessel remains afloat, and ships retain the ability to run on diesel alone if hydrogen is unavailable at a particular port.

“You can think about it like turning every ship in the world into a Toyota Prius,” Evyatar Cohen, Newlight’s co-founder and COO, explained. “The hydrogen is controlled by an algorithm that determines the precise moment to inject it. Getting that timing right is crucial—if you miss it, you risk damaging the engine rather than improving fuel efficiency.”

Rather than selling the hardware, Newlight leases the system, sources the hydrogen, and reports the resulting savings to its clients. For instance, one fleet operator with 10 retrofitted vessels previously spent roughly $100 million annually on fuel. Under the Newlight lease, the operator now pays about $80 million for fuel and approximately $10 million to Newlight, netting a $10 million annual savings. Across three key customers, Newlight currently has 12 vessels under contract, representing an estimated $110 million in annual revenue for the company, against a target market of roughly 60,000 ships large enough to justify retrofitting.

Newlight’s development path progressed from a small test engine to a larger unit, followed by testing on a yacht engine and an attack-boat engine. The milestone of a commercial test bed was reached when Lomarlabs—the venture arm of UK-based shipping group Lomar—offered a Lomar Shipping vessel for the first real-world commercial trial.

“It took us roughly a year from when we started collaborating to the point where testing commenced on their vessel,” Stylianos Papageorgiou, Lomarlabs’ managing director, shared. He described his firm’s role as investing “primarily sweat equity” by providing hardware startups with a real ship to prove novel technologies at sea. This process demanded more than just engineering; it required securing regulatory approvals, executing a full retrofit, and managing the complex logistics of fueling a ship with hydrogen—a fuel that, unlike diesel, is not yet widely available at ports globally.

Newlight’s customer base extends beyond shipping giants like Maersk to include mid-sized operators. “It’s wrong to assume that only large fleets are compliant,” Papageorgiou notes. “There are plenty of smaller companies with limited vessels that are highly sensitive to these regulations for sound business reasons.” Even within the largest fleets, compliance remains uneven; having a few flagship vessels at the forefront does not mean the rest of the fleet has kept pace.

Beyond The Megacarriers: Compliance At The Middle Tier

Newlight is not the only option for cleaner shipping. Ammonia-powered engines and full hydrogen conversions promise to eliminate fossil fuels entirely, while electric propulsion is advancing for shorter routes. However, according to Newlight, all three alternatives remain years away from being commercially viable at a fleet-wide scale.

“The world is not ready,” Cohen explains, pointing out that a full ammonia or hydrogen conversion can cost three times what a ship currently spends on fuel. While bearable for one or two showcase vessels, such costs are unsustainable across an entire fleet aiming to remain competitive. Newlight’s strategy is to grow alongside the market: replacing what is economical today and expanding that share as hydrogen infrastructure and pricing improve.

According to Papageorgiou, the IMO’s gradual timeline actually works in Newlight’s favor by highlighting the gap between regulation and reality. He remains optimistic that the IMO’s net-zero strategy will ultimately prevail, noting that every major IMO rule has faced years of political resistance before taking effect. In the interim, fleet operators face a widening gap between where regulations are headed and what their current fleets can achieve—a divide that strongly favors solutions already proven to work.

“There is immense value in solutions that can be retrofitted without disrupting ship operations,” he emphasizes.

Back aboard the vessel that completed the run from Singapore to Ghana, regulatory debates did not alter the physical reality at sea: an ordinary bulk carrier, identical to thousands still in service, burned a quarter less diesel and emitted significantly less carbon. By shielding fleets from maritime chokepoints and volatile petrostate supply lines, this technology provides a strategic hedge that goes far beyond simple regulatory compliance. As CEO Hillel put it succinctly: “That is exactly where Newlight fits.”

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