INTERVIEW: Wärtsilä Sees Scrubbers as 'Dominant' Emissions Solution for Newbuildings

Wärtsilä will be installing a pilot carbon capture system on a Solvang ASA ethylene carrier next year. Image Credit: Wärtsilä

Scrubbers have become the dominant product for new vessel orders whose owners are seeking to reduce their emissions, with carbon capture technology on the horizon likely to boost their prospects further, according to engineering firm Wärtsilä.

The company is seeing growing demand for scrubbers both for newbuildings and retrofits this year with a widening spread between VLSFO and HSFO, Sigurd Jenssen, director of exhaust treatment at Wärtsilä, said in an interview with Ship & Bunker.

"For the majority of newbuildings, once you get to a certain segment or size at least, then scrubbers are the dominant solution," Jenssen said.

"On the retrofit side, interest is certainly growing.

"It's been quiet for natural reasons given the spread last year.

"But this has been steadily rising, and in the last few months we've taken some retrofit orders and we see there is a lot more activity in the market."

Spread Volatility

Prospects for scrubbers took a heavy blow with the COVID-19 pandemic in 2020 as crude prices crashed and the VLSFO-HSFO spread -- a key measure of the savings to be made by using scrubbers -- narrowed sharply.

The global average spread was as little as $52.50/mt in April 2020, according to Ship & Bunker's G20 index of prices at 20 leading ports, down from $306.50/mt at the start of that year.

But rising crude prices this year, particularly in the wake of Russia's invasion of Ukraine, have seen the spread widen again, with a G20 average of $188/mt on Tuesday.

The spread "presents a very good business case for scrubbers, and we're seeing that in the enquiries that we're getting," Jenssen said.

Material Shortages

But the current turmoil in global supply chains is also causing some problems for scrubbers, with some manufacturers reporting shortages of the materials needed to make them.

"I think in any type of manufacturing that you're in these days, you'll see concerns related to steel availability," Jenssen said.

"We still have steel on hand, so we're not directly affected by it, but of course if the situation persists then it will have a result on lead times eventually.

"The other aspect is semiconductors and electronics."

Washwater Restrictions

The political climate for scrubbers has been highly changeable, with regulators including the IMO seeing them as a valid form of abatement technology in advance of the shift to VLSFO in 2020, but opposition to them emerging rapidly in some quarters after that.

Several port and regional authorities imposed restrictions on the discharge of washwater from some scrubber models in 2020, citing a potential threat to the marine environment. The scrubber industry tends to view these restrictions as being unnecessary, and has commissioned research finding the environmental risks to be at an acceptable level.

But the new announcements of restrictions along these lines have slowed in recent months.

"The ones implementing them have done so, and the others have chosen to look at the data rather than the more emotional aspect of it," Jenssen said.

"We don't expect any further restrictions; there may be clarifications coming, but nothing significant.

"The scrubbers that we deliver are compliant with the current regulations, and these regulations are based on a scientific foundation, so as long as we keep science at the forefront of those regulations, we don't see a big issue."

Last week the IMO's PPR sub-committee agreed new draft guidelines seeking to harmonise how the environmental risks are assessed.

The restrictions that have been imposed so far are on the discharge of washwater from open-loop scrubbers into the ocean. But Wärtsilä has not noted a decrease in its sales of open-loop scrubber models in favour of hybrid or closed-loop ones in response, Jenssen said.

"It's about two-thirds open-loop and one-third hybrid, and that tends to stay the same," he said.

"There will be variations, but it's more or less consistent."

Carbon Capture Around the Corner

The next big development in marine emissions abatement technology will be carbon capture and storage systems for ships that could allow them to capture a share of their GHG emissions and thus continue to use conventional bunker fuels for longer.

Wärtsilä has been running tests for the past few months on a 1 MW marine carbon capture unit, and has an agreement to install a carbon capture system on a small ethylene carrier next year. The firm is working on a solvent-based model, seeing it as the most mature method of capturing CO2 from exhaust gas.

Any carbon capture systems are almost certain to be used in conjunction with scrubbers, as the exhaust will need to be pre-treated to remove other emissions before its carbon can be removed.

"It's looking very, very promising," Jenssen said.

"We see a lot of interest from all parts of the industry."

The firm expects cost of capture to be in the range of EUR 50-70 per mt of CO2, including capital and running costs but excluding what happens to the captured carbon once it has been delivered to shore.

"We will be able to capture 70% of carbon at the point of exhaust," Jenssen said.

"But we're also seeing different ambition levels from different parts of the industry.

"Some are looking at Carbon Intensity Index compliance, where around 20-30% is enough, while others may be looking to capture more to move towards carbon neutrality.

"We are aiming to develop a modular solution that can be tuned and targeted to the different ambition levels from shipowners."

After the initial pilot next year, three more will follow in 2024, allowing for a fuller release of the technology in 2025. But that will require emissions regulations to follow at a similar pace, Jenssen said.

"It goes a little bit hand-in-hand with the incentives, because for a shipowner today, there's no financial benefit in capturing the CO2," he said.

Full Decarbonisation

For full decarbonisation, the systems may need to be used in conjunction with other means of reducing emissions, Jenssen said.

"100% [carbon capture] is perhaps too much of a stretch," he said.

"As you increase the capture rate, it gets progressively more difficult as there's fewer CO2 particules and more distance between them in the exhaust gas.

"But on land, I think they're achieving capture rates in the high nineties; that may or may not be achievable on a ship.

"And if you mix in biofuels, then of course in theory you could become carbon-negative."