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Scorpio Bulkers question scrubber solution

09 Feb 2018

Dry bulk commodities transportation firm Scorpio Bulkers have questioned the use of scrubbers as a solution of meeting the upcoming International Maritime Organization (IMO) sulphur cap of 0.50% coming 2020.

“It is ironic therefore that decarbonization can be left up to a ship that is out of sight and out of the reach of many regulators,” said Cameron Mackey, COO of Scorpio Bulkers in a recent earnings call transcribed by Seeking Alpha.

“So, in other words, I think it is only a matter of time before these regulators revisit scrubber solution and realise that a scrubber takes emissions and instead of putting them into air, actually puts them into the sea.”

According to Mackey, ship owners are not prepared to undertake expensive capital projects to install scrubbers as the group is unsure if the upcoming 2020 sulphur regulation will not be changed or modified.

“So number one is we and most ship owners would be naturally quite skeptical that the regulations don’t change.

“The second part of skepticism or cynicism is that the technology is actually adequately designed and resilient and there are tales and case studies of those who have installed scrubbers already in the cruise industry and some of the short sea shipping industry that indicate that this technology, even as it is currently, may not be adequate to address the objectives that the regulators are putting out there.

“And then, there are other questions in our minds.

“So, we are not foreclosing on the possibility that we might entertain scrubbers at some point, but these risks are so great that it would be really full hardy to undertake that type of investment now.

“The final big risk of course is relative pricing and availability of the different fuels once you get to 2020.

“So, these three things really stand in the way of making any mature long-term decision right now. I think that probably describes the way most ship owners are looking at this at the moment. It may change as 2020 gets closer, but that’s the way is now.”

Scorpio Bulkers owns and operates a fleet of modern mid to large size dry bulk vessels, specifically Ultramax and Kamsarmax vessels (62,000 and 82,000 dwt, respectively).

On a fully delivered basis, the Scorpio Bulkers fleet will have a total carrying capacity of approximately 3.2 million dwt.

Published: 9 February, 2018

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