By Mike Wackett
The pro-scrubber Clean Shipping Alliance 2020 has strongly criticized the EC for urging the International Maritime Organization (IMO) to restrict the use of open-loop exhaust gas cleaning systems (scrubbers) in ports around the world. But vessels fitted with scrubbers are in high demand and at least a third of newbuild vessels will have them, enabling the ships to continue to consume cheaper, higher-sulphur fuel. Under its 0.5 per cent sulphur cap on fuel used by ships from 1 January 2020, IMO currently approves the use of both open-loop scrubbers, where wash water is discharged back into the ocean, and closed loop systems, where the water is retained for disposal at a suitable port facility. The EC has submitted an “evaluation and harmonization” proposal for consideration at IMO’s Marine Environment Protection Committee (MEPC 74), due to meet in London in May.
CSA 2020 Executive Director Ian Adams said: “This proposal is an attempt by the EC to push forward restrictions on scrubbers, which are accepted globally by IMO, EU and others as acceptable means of improving air emissions quality in controlled areas.”
“Within two weeks of a draft surfacing, the commission had taken the proposal to a one-day working party review and then submitted it to IMO,” he said. “Clearly this was planned to avoid the open discussion and deliberation that a proposal with such far-reaching impact requires.”
Mr. Adams claimed the EC’s proposal was “based mostly on speculation”, and that there was an “absence of credible evidence” to support the restrictions on scrubbers.
“The EC initiative is needlessly creating baseless concerns at a time when there are already very real issues in the maritime industry regarding the future availability, suitability and cost of fuels and the effects on global trade and shipping that this will have,” said Mr. Adams.
According to a review by London-based shipbroker Clarksons, only around 4 per cent of the world’s maritime fleet is slated to have scrubbers installed by IMO 2020, however by tonnage this rises to some 10 per cent. Significantly though, Clarksons notes that 32 per cent, almost a third of the vessel orderbook, will be fitted with scrubbers, given that it is more cost-effective to install the systems at the build stage rather than to retrofit, which could involve the vessel spending up to six weeks out of commission.
CSA 2020, which represents over 30 commercial and passenger shipping companies, said its members had invested to prepare their ships for IMO 2020 regulations, which “endorse the use of open and closed loop scrubbers in all waters”. “To see the Commission take this step…. is beyond disappointing,” said Mr. Adams.
Singapore is so far the most high-profile port to ban the use of open-loop scrubbers in its waters from 1 January 2020, but several other ports are also considering bans. However, according to some experts, the ban will in practice have a minimal impact on the economics of scrubbers fitted on deepsea vessels, given that they already have to switch to low-sulphur tanks when trading in SECAs (sulphur emission control areas).
Notwithstanding the potential ban on open-loop scrubbers in ports, with the price difference between HFO and LSFO (low-sulphur fuel oil) predicted to be around $200 per tonne, the ‘winners’ from IMO 2020 in the liner sector could be carriers such as MSC and Evergreen that have a pro-scrubber strategy.
Moreover, brokers The Loadstar spoke to recently are already looking at a two-tier charter market from next January, with vessels fitted with scrubber technology expecting to command a significant daily hire premium.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)