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Scrubbers

South Africa postpones position on open-loop scrubbers due to Covid-19 delays

In Q1 2020, South Africa was required to complete a study on the impact of scrubber wash water discharge on the environment before making an informed decision.

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The South African Maritime Safety Authority (SAMSA) on Monday (7 September) said it has postponed a decision on whether to ban the use of open-loop scrubbers in South African waters.

SAMSA, on 24-25 July 2019 at a South African National MARPOL workshop, said South Africa was required to commission and complete a study on the impact of open loop system wash water discharge on the marine environment.

The study was first commissioned in Q1 2020 with a local South African University and was due to be completed in Q2 2020.

However,  the imposed lockdown due to COVID-19, had negatively affected the delivery timeline of the study and resulted in South Africa not being  able to finalise its policy on the use of open loop scrubbers, based on scientific analysis. 

With the current restrictions, it is estimated that the study should be finalised by December 2020.

SAMSAadded that South Africa will review its position no later than December 2020 and should there be any amendments, an updated Marine Notice will be issued.

South Africa continues to accept all type approved scrubbers and will re-evaluate its position in December 2020.

A full copy of Samsa’s circular is available for download here.


Photo credit: John Chu
Published: 10 September, 2020

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Scrubbers

Denmark government considers ban on wastewater discharge from scrubbers

New figures from Danish Environmental Protection Agency show that discharge of scrubber water from ships is a significant source of several of the heavy metals and tar substances that pollute marine environment.

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Denmark government considers ban on wastewater discharge from scrubbers

Denmark’s Minister of the Environment Magnus Heunicke on Friday (8 March) said he will discuss with Parliament on how the discharge of wastewater from scrubbers can be banned from its waters.

In a statement on the ministry’s website, the ministry said new figures from the Danish Environmental Protection Agency show that the discharge of scrubber water from ships is a significant source of several of the heavy metals and tar substances that pollute the marine environment. 

Ships use so-called scrubbers to clean the flue gas of sulphur, by washing the smoke and then discharging the scrubber water directly into the sea.

Heavy metals in fish and shellfish for human consumption can have serious negative effects on humans in large quantities. For example, excessive amounts of lead can affect the development of the central nervous system, including the ability to learn and remember, while cadmium can affect the function of the kidneys.

"When heavy metals and tar substances are discharged into our marine environment, they largely do not disappear and remain in constant circulation in the sea,” Heunicke said. 

“The substances accumulate on the seabed and in the ocean's food chains, and this is deeply worrying for our marine environment and our health. We have to find a long-term solution to that.”

 

Photo credit: Denmark’s Ministry of the Environment
Published: 12 March 2024

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Scrubbers

Glander International Bunkering: The growing role of scrubbers in bunker market

Shipping firms have been installing scrubbers at pace, with HSFO representing 32.3% of Singapore’s total demand last year – up from 29.2% in 2022, 25.8% in 2021 and 21.3% in 2020, says Glander.

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Global bunker trading firm Glander International Bunkering on Thursday (15 February) published an article discussing the return of High Sulphur Fuel Oil (HSFO) and adoption of scrubbers as well as what that means for costs and compliance:

While the bunker industry’s attention has been focused on alternative fuels, a quiet revolution has been going on behind the scenes: the return of HSFO. 3.5% sulphur fuel oil had been the dominant grade of bunker fuel up until 2020, when the IMO’s global 0.50% sulphur limit shifted the majority of demand to VLSFO. But HSFO was not banned – ships had the choice of installing exhaust gas cleaning systems, or scrubbers, to allow them to continue burning the cheaper high-sulphur product. Shipping firms have since been installing the systems at pace, with HSFO representing 32.3% of Singapore’s total demand last year – up from 29.2% in 2022, 25.8% in 2021 and 21.3% in 2020. The systems work by spraying water into a vessel’s exhaust, washing out sulphur and other emissions and leaving them still compliant with the 0.50% limit while burning cheaper HSFO.

Economic Considerations

The main reason to use a scrubber is to generate savings in fuel bills. On a global average basis, delivered HSFO has traded at a discount to VLSFO of about $65-405/mt since the start of 2020. Depending on the size and type of ship, scrubbers can cost between about $2 million and $8 million to install. Operating costs are minimal, with only a small extra power requirement needed to run the system, so the bulk of the fuel savings can go towards paying off the initial capital expenditure. Installing the systems usually requires the ship to be out of service at a dry dock for two or three weeks, but this can be arranged at the same time as scheduled dry-docking. Depending on the HSFO-VLSFO price spread, the systems typically pay for themselves within a few years, after which time the fuel-bill savings almost all come as improved profitability. In 2022, Eagle Bulk said it expected its $100 million investment in scrubbers to have paid off by the end of the year, within two years of IMO 2020.

Environmental Impact

The environmental impact of scrubbers is a contested issue. The majority of scrubbers in use are open-loop models that discharge their washwater into the sea, rather than retaining it for disposal at ports. Opponents of the technology regard this as just shifting shipping’s sulphur pollution problem from the atmosphere into the oceans, and have raised concerns about the impact on the marine environment. For its part, the scrubber industry funded research on the environmental impact of washwater in 2021. The report found no toxicity impact for fish, and some short-term effects on algae and crustaceans in high concentrations. The report characterised the risk to the aquatic environment as acceptable. One other environmental effect should be considered. Because HSFO requires less energy use by refineries to produce than VLSFO, the use of HSFO with a scrubber comes with marginally lower net GHG emissions than using VLSFO.

Challenges and Risks

The main challenges around using a scrubber are around regulatory risk and HSFO availability. The regulatory risk concerns the possibility of ships not being allowed to use their scrubbers, meaning they will need to consume VLSFO and forgo the fuel savings. While the IMO recognised scrubbers as a valid means of sulphur limit compliance, a range of port authorities around the world have banned the discharge of washwater from open-loop models in their waters since 2020, citing environmental concerns. For most ships, these areas where scrubbers cannot be used represent only a small fraction of their area of operation, meaning that they can still generate enough fuel savings by using the systems, but for some more geographically-confined vessels the bans may have a larger impact. Over the longer-term, some politicians are arguing for a wider ban on the use of scrubbers. Were a large bloc such as the EU to ban scrubber washwater discharge across its jurisdiction, this would pose a much larger threat to the systems’ viability. A more pressing concern is the availability of HSFO at ports around the world. While HSFO was the dominant bunker fuel grade, it was easily available worldwide, but it has since become more of a niche product at some ports. Refineries are still producing HSFO in large quantities, but at ports where few scrubber-equipped ships call for bunkers, some suppliers have given up on selling it. With fewer suppliers competing for HSFO demand at these ports, competition is limited and margins creep up, significantly cutting into the discount for HSFO versus VLSFO. This can result in a situation as seen in Gibraltar last year, where the HSFO price approached parity with VLSFO in September.

Future Outlook

The future outlook for scrubbers will depend in part on how quick the shipping industry is to abandon fossil fuels altogether. With any change on that scale looking unlikely for at least the next decade, the systems are probably set to remain a significant presence in the global bunker market for many more years, absent any wider move against them by regulators. One factor that may keep the systems relevant over a longer period will be their adaptation to cover other emissions. Scrubber manufacturers are increasingly developing models that combine conventional scrubbers with carbon capture systems – if this technology proves economically viable and is accepted by regulators, the combined systems are likely to become an attractive choice for shipowners wary over the shift to alternative fuels.

 

Photo credit: Glander International Bunkering
Published: 16 February, 2024

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Bunker Fuel

Performance Shipping orders LNG-ready, scrubber fitted LR2 tanker duo

Firm has signed two shipbuilding contracts with China Shipbuilding Trading and Shanghai Waigaoqiao Shipbuilding for the construction of two 114,000 DWT LNG-ready LR2 tanker vessels.

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Performance Shipping orders LNG-ready, scrubber fitted LR2 tanker duo

Performance Shipping, specialising in the ownership of tanker vessels, on Wednesday (20 December) announced that, through two separate wholly-owned subsidiaries, it has signed two shipbuilding contracts with China Shipbuilding Trading (CSTC) and Shanghai Waigaoqiao Shipbuilding (SWS) for the construction of two 114,000 DWT LNG-ready LR2 Aframax product/crude oil tanker vessels. 

The vessels are expected to be delivered in January and April of 2026, at a purchase price of US$64,845,000 per vessel, net of third-party commission. 

15% of the purchase price is payable upon receipt of a refund guarantee; 10% of the purchase price is payable at each of the milestones of steel cutting, keel laying, and launching of the vessels, and the remaining 55% of the purchase price is payable upon the delivery of the vessels.

The vessels will be equipped with electronic main engines with high-pressure selective catalytic reactors (HPSCR) for Tier III (NOx Emissions) compliance, exhaust gas cleaning systems (EGCS – commonly referred to as scrubbers) for Tier II (NOx Emissions) compliance, and ballast water treatment systems (BWTS).

Company’s Chief Executive Officer, said: “These shipbuilding contracts supplement the previous contract we entered into with SWS in March 2023 for a Tier III product/crude oil carrier scheduled for delivery around October 2025. The construction of these LNG-ready LR2 oil tankers, equipped with the latest high-specification engines and meeting stringent emission requirements, along with scrubbers and water ballast treatment systems, will take place at the largest and most reputable state-owned shipyard in China.”

“Following the sale of our oldest, 2007 built, Aframax tankers, M/T P. Fos in October 2022 and M/T P. Kikuma in November 2023, the Company is now poised to take delivery of three identical “sister” vessels in late 2025 through early 2026.”

“These sales and acquisitions constitute our core fleet expansion and renewal strategy. We believe that tanker fleet growth will reach historical lows in the coming years and maintaining a modern fleet among an aging global fleet during periods of high seaborne trade demand will result in sustainably strong fundamentals and higher asset values.”

Photo credit: Scott Graham on Unsplash
Published: 21 December, 2023

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