From the Wall Street Journal: ‘Maritime Emissions Rule Triggers Split in Shipping Costs’

Costas Paris published in the 12/20 issue of the Wall Street Journal a very complete note on the benefits of adopting scrubber technology.

“An environmental rule hitting the maritime world at the turn of the New Year will open a steep divide in operating costs across shipping markets.

“A large share of vessel operators have chosen to limit their sulfur emissions with exhaust systems called scrubbers that trap sulfur created by fuel-burning engines.

“The systems cost several million dollars but will allow the operators to avoid buying new low-sulfur fuel that oil traders say will be some 30% more expensive than conventional bunker fuel. That will give ships with scrubbers a big cost savings that companies expect to use to get an edge in competition for international cargoes.”

Starting Jan. 1, he notes, some 60,000 oceangoing vessels must cut their sulfur emissions by more than 85%. There are two approved methods, he says. Buying far more expensive fuel. Or installing scrubbers into the ships.

The International Energy Agency estimates that by 2025 there will be some 5,000 ships using scrubbers, covering about 30% of world-wide tonnage. Scrubbers typically last for up to five years, after which operators will move to use low-sulfur fuels.

Shipowners say they are making a clear economic calculation in putting off the fuel switch for now.

“There are significant fuel cost savings with scrubbers and we’ll have them on half of our fleet by the second quarter,” said Robert Hvide Macleod, the chief executive of Norway-based tanker giant Frontline Management A/S.

The article also explains how scrubbers operate.

Wall Street Journal


Graphic via WSJ

Full article here.