IMO2020: Bigger Fuel Bill Unavoidable but Scrubbers No Panacea

by Ship & Bunker News Team
Thursday June 7, 2018

Despite facing bigger fuel bills, that scrubbers have yet to make their case to shipowners would seem to be a valid conclusion if analyst opinion at Posidonia is anything to go by.

Certainly shipping analysts spoken to by maritime news provider Lloyd's List at the shipping event can see the flaws in the scrubber argument even though the rise in the cost of bunker fuel is regarded as inevitable.

"There are still too many ships around and when you are working in an environment of overcapacity you simply cannot expect to pass on the bill [to charterers, cargo owners] in its entirely," Bimco chief analyst Peter Sands was quoted as saying.

Stuck with a higher bill, it is conceivable that scrubbing technology, which allows ships to continue to use cheaper high sulfur bunker fuel post-2020, might appear in a more favourable light.

But act now on scrubbers was the message of one analyst.

"Unless you jump on the bandwagon now, that window of opportunity closes very quickly," NS Lemos analyst James Leake was quoted as saying.

According to another analyst, the initial cost of scrubbing installation is a deterence to many would-be purchasers.

Simon Ward, director at Ursa Shipbroking, could understand the hesitancy: "If you are talking, say, a $2 million investment on a ship that is worth $20 million, are you going to get your money back?"

From the start of 2020. ships must burn compliant bunker fuel that meets the 0.5% sulfur cap or use emissions abatement technology more commonly known as scrubbers.

While the new rule of bunker fuel comes into force in under two years' time, take up of scrubber technology to date has been very low.