Scrubbers - BIMCO Bulletin


Technology and efficiency | Scrubbers May 2018 Scrubbers the pros and cons By Rasmus Nord Jrgensen, Communications Director at BIMCO 2020 and the global sulphur cap is closing in. Scrubbers are one solution to the 0.5% cap, but there are contrasting opinions on using them and not only because of differences in trades or business areas. The Bulletin asked a couple of prominent companies to explain their position. Scrubbers are a backwards development and not helpful in any way Pacific Basin Mats Berglund, CEO, Pacific Basin Scrubbers are a backwards development and not helpful in any way. They are increasing bunker consumption, repair and maintenance costs, decreasing cargo capacity and are not really helpful environmentally or technically, the CEO says. The Hong Kong-based company owns 106 bulk carriers and operates around 220 ships in to tal. The company welcomes stricter environmental regulations. Berglund says he would have preferred heavy fuel to be banned altogether. In his opinion, installing scrubbers on all ships in the world is not an efficient use of capital and space, and doesnt reduce NOX or CO2 emissions. On the other hand, a global ban on heavy fuels would lead to higher fuel costs and prevent the operational speed of ships from increasing, which would contribute to lower emissions not only of SOX but also of NOX and CO2. Longer term, LNG-fuelled engines would be the better choice environmentally, as infrastructure is built out and costs come down with scale, according to the CEO. Also, with most open system scrubbers, Pacific Basin believes that most of the sulphur ends up in the open ocean whether you have a scrubber or not. It reacts with the alkalinity of the seawater and is arguably harmless. Other particular matters, ash and heavy metals also end up in the ocean either via the exhaust or via the wash water, so out in the middle of the oceans it is partly a meaningless process. We do not think it will be the solution in our segment. Our solution is to burn low sulphur fuel. Scrubbers are a trap for shipowners. We take on an investment that oil companies rightly should do, Berglund says. Many shipowners assume that if they install scrubbers, they will capture the price difference between compliant fuel and heavy fuel oil (HFO). But, if the trend is towards scrubbers, it wont be long until the freight will be set by HFO again and there will be no benefit left to pay back the scrubber investment with, he says. He also believes it isnt possible to install all the scrubbers needed on the world fleet in time. And, even if you did install scrubbers, you may not be able to get the HFO where you need it in the future. If you are a cruise line or sailing on a fixed route, you probably can, but we are in the handysize and supramax segments. We trade all over the world, and we are worried about the supply. He also points out that the capital expenditure for scrubbers is more difficult to pass on to customers compared with the ongoing cost of fuel. The preferred solution is to burn compliant fuel and pass the added cost to customers. That way the sulphur and particular matters will be removed from the fuel correctly and at a much larger scale by the refineries, Berglund says. The assumption was that compliant fuels would be available as blends. But these would have different viscosities, which engines dont like Spliethoff Gerrit Jan van Ommen, Retrofit Programme Manager, Spliethoff Spliethoff has decided to use scrubbers and sees a strong business case for doing so. The company installed the first one in November 2012 and has since acquired significant experience with the technology. Weve taken a conservative position in our calculations for the spread between compliant fuel and hfo (heavy fuel oil). With that calculation our return on investment would be in a few years. We concluded that to be a significant advantage to the installation, Gerrit Jan van Ommen says. Spliethoff uses open-loop scrubbers on 14 general dry cargo ships. These scrubbers use sea water, which is flushed back to the ocean. The alternative is closed-loop or hybrid scrubbers, where the wash water is cleaned in a closed system, or can be switched between the two modes. The group operates a large fleet, mostly under the Dutch flag. After its first installation on 20 ships, the company ordered 19 additional scrubbers and intends to fit most of its fleet with the technology. It picked the open-loop system because it is more reliable, has a lower cost and is less inconvenient for the crew. Van Ommen says: We want to lessen the burden on the crew. The closed loop increases the number of components and you need more monitoring and more procedures. Less complex is also more technologically reliable. Open loop is as simple as you can get it. Spliethoff is open about its positive results to promote the use of scrubbers to maximise the HFO distribution network worldwide after 2020. Oil majors confirm the availability of HFO. Power plants already have scrubbers and will stay on HFO. Demand will remain. But, will it be available at the ports we visit? That is a challenging question, he says. The company sees a clear downside for the blended fuels ships are expected to use under 2020 rules. The assumption was that compliant fuels would be available as blends. But these would have different viscosities, which engines dont like. We are more confident that the quality is there for the HFO, Van Ommen says. And, he says he isnt fond of the argument that the higher fuel cost can simply be paid be the customers. Spliethoffs Scheldegracht with a scrubber on the side with windows painted on. Photo courtesy of Spliethoff. Cleaner operations are positive. But we need to be careful not to increase our price so much, because of environmental initiatives, that the preference changes to land-based transportation. This, he says, would lead to worse conditions on the road and more pollution. Connect with BIMCO Facebook Twitter Linkedin YouTube