The IMO’s 0.5 sulfur cap on marine fuel set to enter into force in 2020 has caused numerous headaches to shipowners as they start to prepare for compliance of their fleets with the new regulations.
Speaking of the available solutions during a Capital Link panel on Marine Fuels: An Industry in Transition in New York, Marc Refsoe Holm, Leader US Fuel Desk – Maersk Oil Trading, said that “Maersk is not on the scrubber team.”
According to Holm, there are various operational concerns when it comes to scrubbers as they have not established themselves as a proven technology on large two-stroke diesel engines used across Maersk’s fleet.
“We do not believe that the open loop scrubber system is actually gonna be a solution. It might be a short-term solution, and then, very quickly, the shipping world will be forced to switch to a closed-loop system, which requires a completely different calculation, taking into account the issues such as infrastructure and cost,” Holm explained.
Another issue raised with respect to scrubber technology is the lack of a level playing field.
“We feel that the scrubber technology potentially allows for an open door for different operators to maybe opt not to run their scrubbers when outside the port limits. We think that there will be major issues when it comes to compliance and enforcement of the regulations,” he added.
Referring to the solutions being pursued by Maersk and major shipping carriers in order to become compliant with the new sulfur cap, Holm said that those would probably be 0.5 % blended fuel oil and marine gasoil-based solutions for tanker owners with smaller ships.
Furthermore, penalties for non-compliance with the new regulations seem to be minor when compared to investment costs to become compliant and fears have been raised on whether this might prompt owners to dodge compliance.
Port authorities are yet to perfect their enforcement strategies to avoid such occurrences, and development of a robust enforcement system is key.
With respect to alternative marine fuel options available on the market, John Lycouris, CEO of Dorian LPG said that, from a suppliers perspective, LPG looks like an easier solution than LNG as the latter lacks the necessary infrastructure.
There are a lot of small ships that can carry out LPG bunkering, and there are around a 1,000 places across the globe that can take or deliver LPG, Lycouris explained.
However, an LPG engine is yet to be introduced into the market, hopefully in the next couple of years, he highlighted.
Aside to LNG, methanol, and ethanol-driven engines are a possibility, and these two alternative fuels are easier to handle and store than LNG.
“Some operators will be using their cargos for marine fuel, LNG carriers will lean to use LNG as fuel, the same goes for methanol, ethanol, LPG, etc.”
Dorian LPG has opted for scrubber technology for its ships, and, as highlighted by Lycouris, this solution does not allow for manipulations, as the scrubbers have the ability to record if, and when, they are switched off and can pinpoint the exact location of such instances due to GPS technology.
In conclusion, residual fuel is likely to be a badly hurt and extremely cheap commodity due to the implementation of the forthcoming regulations.
What is more, a considerable impact is expected on trading patterns and refineries, especially in South America, and Iran.
World Maritime News Staff