mana.ir

According to MANA reporter, less than two years remain before the IMO’s sulfur cap comes into effect on January 1, 2020, requiring shipowners to burn 0.5% sulfur-compliant bunker fuel compared with 3.5% sulfur currently.

They have a variety of options — 0.5% sulfur bunker fuels, marine gasoil, scrubbers with HSFO, or alternatives such as LNG, LPG and even methanol.

However, confusion reigns as the industry grapples with the magnitude of the change and the possibility of additional costs.

There are about 95,000 ships on water. Currently less than 300 are installed with scrubbers, John D’Ancona, divisional director, dry cargo, at Clarksons Platou, said at the S&P Global Platts 5th Annual Asian Refining Summit in Singapore last week.

“The reasons are quite simple: uncertainties surrounding the options going forward, particularly fuel choices and pricing.

“Furthermore, shipowners are currently having to deal with other regulatory costs such as installing ballast water treatment systems. The additional capex and opex of installing scrubbers, and uncertainty about the price spread between compliant fuels and HSFO, is likely to prompt many to wait,” he added.

Besides the high costs associated with retrofitting vessels with scrubbers, the need for new port facilities to deal with sludge treatment and continuous monitoring that abatement systems necessitate would likely impede its widespread adoption.

“We estimate at least for the first five years from 2020 onward the use of HS [heavy sulfur] fuels for ships equipped with scrubbers will be limited to around 45 million mt/year,” Trani said.

Citing industry estimates, Trani said global maritime transport consumption of high sulfur heavy fuel oil would be around 240 million mt in 2019.

Maersk Line, the world’s largest shipping company, said last year that it would not be using scrubbers.

More recently, Hong Kong’s Pacific Basin Shipping — one of the world’s largest owner and operator of modern Handysize tonnage — has also dismissed the use of scrubbers, opting instead for low sulfur fuel oil.

“We do not think that sulfur scrubbers are an effective solution either technically or environmentally,” Pacific Basin CEO Mats Berglund said during the company’s results briefing recently.

However, some sources still maintain that pricing will be the ultimate deciding factor to determine the choice of bunker fuel, a shipowner will make.

According to some shipowners, high sulfur fuel oil has to be at least $200/mt cheaper than 0.5% low sulfur fuel oil or 0.1% marine gasoil to incentivize the installation of scrubbers.

Scrubber installation is currently expensive, around $3.5 million for each ship, while LNG, despite being the most suitable fuel, has a long way to go, said Neelabh Sharma, chief manager, strategy, at IOC.

LNG bunkering requires huge spending on upgrading port infrastructure and is mostly viable for short/medium fixed routes where availability is more or less assured, industry sources said.

If HSFO prices fall, it will make installation of scrubbers attractive, Coco Vroon, managing director of the Vroon Group, said at the MARE Shipping Forum in Singapore recently.

“We don’t know what will happen at that point of time. We are all guessing,” he said.