Manufacturers of marine scrubbers in attendance at the Asia Logistics and Maritime Conference in Hong Kong last week (23-24 November) would probably have left dispirited.
The adoption of scrubber technology, to comply with the global sulphur cap on ship emissions set to become mandatory in 2020, was largely rejected by a panel of some of the most important leaders in the industry, who suggested they would use low sulphur fuels instead.
Based on the pledge made by the refineries to provide ample supplies of the required distillate fuels post 2020, Valles Steamship executive director Wellington Koo said: “I think for us as shipowners, I would say no to scrubbers for the meantime.”
Chief executive of Ocean Network Express, Jeremy Nixon said that the space scrubbers took up on a ship and a prohibitive price tag meant that the line was not going to adopt the technology anytime soon.
Shipping analyst at SeaIntel Alan Murphy confirmed that Valles and Ocean Network Express were not alone when he told the audience that “almost no one was investing in scrubbers.”
The chief operating officer of Navig8 Group Andrew Hoare was the only shipowner to go against the tide, suggesting that as a result of power stations rejecting fuel oil there would be a surplus and prices would fall.
“The refining sector is going to have to sell this fuel oil and no better place to sell it than to the biggest customer they have already,” he said. With the fall in the cost of scrubbers falling precipitously from estimates of as much as US$5m a couple of years ago to around US$2m today, Mr Hoare said there was a case for adopting the technology.
Interestingly the views of most the shipping community regarding scrubber adoption represented at ALMC are in opposition to those of some closest to the refiners.
In October, Gulf Oil Marine’s global technical manager, Peter Deegan told our sister publication, Asia Maritime that scrubbers would be the way forward. Substantiating his argument he said:
“As the regulations start to take effect and a lot of shipowners begin using distillate fuel the supply and demand balance will change; and with that change there will be a lot of heavy fuel oil around.
“Whatever the refiners do there will still be plenty of HFO. If a shipowner has a scrubber on-board he will be able to power the vessel with HFO, which the refiners will be practically giving away.
“I would say if a shipowner has ordered a newbuilding he should ensure it is fitted with a scrubber. The fuel costs going forward are likely to be very low.”