Independent repair specialist Goltens expects a surge of scrubber installations to take place due to the upcoming IMO 2020 regulation, when a global sulphur cap of 0.5% will be applied for marine fuel from March 2020.
“When emissions regulations are applied globally, the investment in exhaust cleaning will make more sense to many operators,” believes Goltens COO Roy Strand.
“There will be more customers who choose to invest in scrubber technologies due to the clear payback.”
He suggests that scrubber retrofits have started slow, but momentum is building up.
“Prior to 2018, Goltens Green Technologies had been involved in many emissions control projects evaluating the retrofit of scrubbers, but most of these projects involved cruise and ferry operators and other vessels that spend large amounts of time in the ECAs,” notes Strand.
“For other operators, the retrofit projects involved lower cost piping system modifications and fuel oil cooler installations to allow vessels to periodically operate on LSGO as required.”
However, he has observed a major uptick in interest since the beginning of 2018, with a much broader range of companies actually pushing to retrofit with scrubbers.
“This has resulted in longer lead times for scrubber delivery and increasing competition for the attention of some of the leading scrubber manufacturers. That said, it still does not appear to be the decision most owners are making.”
The IMO 2020 report from Swedish financial group Skandinaviska Enskilda Banken AB (SEB) estimated fewer than 2,000 vessels will have been fitted with scrubbers by the implementation date, and further project a significant price delta between LSGO and HFO providing scrubber-equipped vessels with a significant short-term advantage post 2020.
The SEB report highlights this “wait and see” approach is compounded by the fact that owners pay for scrubbers (CAPEX) and charterers pay for fuel (OPEX), and that if most vessels are operating without scrubbers, the market prices will largely be set by those vessels factoring in higher fuel costs without a competitive disadvantage.
The analysis further highlights those moving to install scrubbers now will be at a competitive advantage compared to their non-scrubber counterparts in the first few years after the implementation.
These first movers will likely be able to charge significant “freight rate premiums” to account for the savings on fuel associated with operating the vessel. These premiums are projected to allow for a quick payback on the initial investment as others move more gradually to scrubbers.
At that point, SEB contends that “it will be too profitable and too tempting not to install a scrubber in 2020”. Roy Strand concurs, but adds that the likely question for late adopters will be: “How long is the wait?”
Published: 30 October, 2018
Additional topics of bunker contamination and OCM services discussed at VPS’ Fuel Management Challenges – The Year of 2021 & Beyond webinar on 23 September; Manifold Times summarises the session.
‘The JMs have failed to discharge their duties by blindly helping the Banks mount a false case against the Defendant,’ wrote defence lawyers representing former IPP Director Dr Goh Jian Hian in court statement.
Lead prosecutor Andreas Myllerup Laursen aims for a fine and a prison sentence in the so-called Syria case scheduled to commence in Odense, Denmark on 26 October, writes the Danish publication.
In a modern re-telling of the story of David versus Goliath, local bunker barge owners/charterers successfully resisted claims brought in the Singapore courts by Phillips 66 for misdelivery of bunkers.
Bunker barge owners and operators; traders and suppliers; banks, including players in other countries, will have to re-examine respective operations, advises Helmsman Associate Director Jonathan Tan.
Vopak BL was a non-essential document with no contractual force and had no effect as a contract of carriage or as a document of title, states written Judgement issued by Singapore Court of Appeal.