LR: Case for Scrubbers is Not Yet Strong or Urgent Enough

by Ship & Bunker News Team
Friday April 24, 2015

Lloyd's Register (LR)'s Nick Brown Wednesday said the case for scrubbers is not yet strong enough to see adoption by large parts of the global shipping fleet, particularly in light of lower bunker prices.

Launching new guidance for shipowners and operators regarding compliance options for MARPOL Annex VI SOx and NOx regulations, LR said "in the majority of the tanker, bulk carrier and container segments the uptake of scrubber technology remains slow."

"With shorter periods inside Emission Control Areas (ECAs), lower fuel consumption (especially due to slow steaming) and typically lower asset residual values, the business case for installing scrubber technology on deep sea tank, bulk or container ships is not, yet, either strong enough or urgent enough."

LR said the recent dramatic fall in bunker prices had eased the blow for shippers in switching to distillate fuels inside ECAs, while hybrid fuels were offering additional alternatives to scrubbers.

However, a 2020 implementation date for the proposed global 0.50 percent sulfur cap would have widespread implications, said LR, including a "possible rapid uptake of scrubber technology."

Those choosing to switch to distillate fuels will see their operational costs increase significantly, but a question remains over whether a rapid rise in demand for scrubbers could adequately be supplied.

The use of Liquefied Natural Gas (LNG) as bunkers is one further option for compliance.

"Whether LNG will make the leap from niche fuel to mainstream is a big question," added LR.

"Early adopters of LNG-as-fuel could start seeing a real return on their investment and any 'LNG-ready' ships may start converting to LNG-fuelled, if and when the bunkering infrastructure develops sufficiently."

Either way, "the time for decisions is fast approaching," said LR.

Recently Baringa Partners said in Ship & Bunker's Industry Insight series that "those who maintain their 'wait and see' approach too long may end up missing the boat" on the use of LNG bunkers.