The countdown has begun for the entrance into force of the 2020 global sulphur cap and the shipping industry has less than a year and a half to become compliant.
There are three main solutions to choose from: installing a scrubber, running your ships on marine gas oil (MGO) or switching to liquefied natural gas (LNG).
World Maritime News spoke with Jan Othman and Sigurd Jenssen, directors of exhaust gas cleaning at Finish technology group Wärtsilä about the uptake of the technology and its key benefits.
Wärtsilä’s portfolio of exhaust gas cleaning (EGC) products includes systems for open, closed and hybrid configurations, featuring three different designs: V-SOx design (From 1 to 35MW), Q-SOx design (From 40 to 70 MW), and I-SOx design (From 1 to 20 MW).
As explained, these systems are suitable for basically any type of a vessel and have so far been installed on cruise ships, ferries, Ro-Ro vessels, containerships, tankers, fishing vessels and bulkers.
In 2018, the demand for Wärtsilä’s scrubbers has been driven mainly by tanker, container, bulker, and the cruise and ferry segments.
Following the IMO’s decision to adopt the 2020 sulfur cap for ships, how would you assess the recent demand for your SOx scrubber technology? Does Wärtsilä have plans to open new hubs to meet the demand for installing/retrofitting scrubber systems?
Othman & Jenssen: Wärtsilä has indeed experienced a significant increase in demand for our SOx treatment technology in the past year and we have seen a high adaptation rate for scrubbers in the newbuilding (NB) market for the last 12 months. Moreover, during the first half of 2018 there has been a significant spike in interest in the retrofit market as owners come to see an increasingly strong business case in installing scrubbers also for their existing fleet across a wide range of vessel types.
We have anticipated the increased demand in the market ahead of the 2020 sulphur cap and we have been working on developing and expanding our sub-supply bases in both Eastern Europe and Asia in order to ramp up production significantly compared to the volumes delivered in previous years. In addition to strengthening our supply base, we have been working on expanding our own in-house engineering capacity and we have opened several new engineering hubs during 2018 to support the increased growth.
What are the key factors to consider before retrofitting a ship with scrubbers?
Othman & Jenssen: Firstly, one needs to ensure that the equipment can be fitted into the vessel before starting a retrofit project and we always conduct a site survey jointly with the owner to ensure this.
Furthermore, it is important to secure that the installed power of the vessel is sufficient to operate the scrubber pumps and to ensure that the scrubber system does not have a negative effect on the stability of the vessel. Moreover, it is important to ensure that the capacity of the vessel’s sea chest is sufficient and that the additional exhaust gas back pressure from the scrubber does not cause any operational difficulties for the ship.
In your opinion, why should owners opt for scrubbers and for which owners are scrubbers the most suitable solution? Once installed, when can owners expect their return on investment?
Othman & Jenssen: In our view there is no single best solution to comply with the global sulphur cap, but the decision is highly dependent on the operational profile and operational area of the vessel.
However, we see that many owners opt to adopt the scrubber technology due to the expected financial benefit of installing a scrubber vs. running their ships on MGO. Furthermore, the currently wide availability of HFO versus other fuels is a key selection criteria for owners choosing to adopt scrubber technology. Due to the high expected fuel spread between HFO and MGO we experience that an owner’s business case for installing a scrubber is increasingly strong, and the pay-back time for the investment is short, for some projects it is expected in a few years.
We have heard numerous arguments against scrubbers ranging from the claim that they are too expensive to install to the questioning of their functionality and viability. How would you comment on this, from the manufacturer’s point of view? Are scrubbers just a medium-term solution?
Othman & Jenssen: We believe, and we think that the behaviour of the market is also supporting this, that the industry is less concerned about the functionality or viability of this technology. Obviously, like any main equipment in a vessel, the EGC system requires proper maintenance, but we have long operational experience of our systems performing well. In addition, we have a high percentage of repeat customers which supports the argument that market is increasingly confident about this technology.
What is more, we also note that scrubber fitted vessels are gaining premiums to non-scrubber fitted vessels in the market.
What can be concluded from the demand when comparing newbuilding and retrofitting projects?
Othman & Jenssen: We expect both markets to remain active and we believe that the scrubber uptake on the retrofit market will continue well beyond the 2020 deadline due to the fact that not all owners will be able to fit their vessels with a scrubber before the deadline.
We have noted that the uptake of scrubbers in the retrofitting market started somewhat later than in the newbuilding market, but now many owners are planning fleet-wide scrubber retrofit projects. One of the reasons for this delay is that although the industry has been aware that the global sulphur cap will come into force in 2020, it has taken longer than expected for owners to conduct their feasibility studies and secure the funding for retrofit projects. Furthermore, there is a wider concern related to both equipment and dry docking capacity on the retrofit market compared to the newbuilding market.
WMN: There have been numerous concerns voiced with regard to open-loop scrubber systems and the impact of the discharge of the washwater on marine life. What is your position on this subject?
Othman & Jenssen: The washwater discharge quality standards have been defined in the Marpol regulations. These regulations are based on scientific evaluations of the potential impact on the marine ecosystems. Additionally, we offer a washwater treatment system also for open-loop systems. This removes a large portion of the particles captured in the scrubber from the washwater.
What are your estimates on the uptake of scrubber technology in the global fleet, percentage-wise, and what can be done to encourage a greater uptake of this technology?
Othman & Jenssen: Our figures show that the uptake of scrubber technology for the NB market is very high, in certain vessel segments we believe majority of owners will opt to install a scrubber. For the retrofit market we believe that we will continue to see an active market and a significant increase in the uptake of this technology.
DNVGL has recently announced that the cumulative number of ships with confirmed scrubber orders through 2020 is currently 873, up from 346 confirmed ships at the end of 2017, and we believe that this trend will continue in the coming years. It is difficult to estimate an exact percentage of the global uptake of the global fleet, but we think a significant portion of the global fleet will have a scrubber installed or under order within the next few years.
Although the market is increasingly open to this technology, we as an industry can continuously educate owners about its benefits versus other means of compliance with the global sulphur cap. We also believe that we can further support owners in educating their crews in operating and maintaining these systems, in order to further encourage a greater uptake of this technology.
In conclusion, is the industry ready to comply with the new regulations until the given deadline?
Othman & Jenssen: We believe that there is still a concern in the industry with regards to how they should comply with the new regulations until the given deadline. Some owners have been more proactive than others to ensure that they have a strategy in place for this. They have secured slots for both equipment and dry docking to ensure an installation prior to 2020, but clearly there are some owners which will not be able to install a scrubber prior to the deadline and hence, we expect the market to remain active also after the 2020 deadline.