Kashif Javaid, Director of Sales, Exhaust Treatment at Wärtsilä. Image Credit: Wärtsilä

When the IMO 2020 sulphur cap took effect, the scrubber decision revolved around fuel spreads.

Install an Exhaust Gas Cleaning System (EGCS) and continue burning high sulphur fuel oil (HSFO), or shift to compliant fuels such as very low sulphur fuel oil (VLSFO) or marine gasoil.

The investment case was grounded in arithmetic. Forecast the spread. Estimate annual fuel consumption. Calculate payback.

The underlying assumption was straightforward: vessels fitted with approved open-loop systems could burn HSFO across most of their trading patterns. Geography is now reshaping that assumption.

The 16 OSPAR contracting parties have agreed a roadmap to restrict discharge from EGCS in the inland waters and port areas of OSPAR member states.

The timeline sets July 1, 2027 for a ban on open loop discharge in those areas, followed by July 1, 2029 for a ban on all discharge, with contracting parties able to delay implementation by three years. OSPAR has also recommended extending the restriction to territorial waters, twelve nautical miles, subject to further review.

Scrubbers remain a legitimate compliance pathway. However, the boundary conditions around their operation are tightening.

Utilisation and Exposure

Early scrubber investment models assumed vessels would operate on HSFO for most of their trading time, with only limited local restrictions.

Once open-loop discharge is prohibited in inland waters and port areas, that utilisation becomes
conditional.

An open loop only vessel must switch to compliant fuel when operating in those restricted waters. The operational mechanics are familiar. The commercial consequences lie elsewhere.

Payback calculations depend heavily on how many hours per year a vessel can burn HSFO instead of compliant fuel. Reduce that burn time and the margin narrows.

A few percentage points may not matter on a transoceanic crude tanker spending limited time in port. On a vessel trading intensively within Northern Europe, the impact compounds.

Fuel spread volatility amplifies that effect. When HSFO discounts widen, reduced burn windows can still support a strong scrubber case.

When spreads narrow, the same geographic constraints compress returns more quickly.

What was once a relatively stable hedge against fuel price swings becomes more sensitive to both market cycles and routing decisions. The interplay between spread direction and discharge geography now sits at the centre of scrubber economics.

Exposure is not uniform across the fleet. A long-haul VLCC calling intermittently at Northwest European terminals faces a different utilisation profile than an MR product tanker or shuttle tanker operating frequent port rotations in the region.

The same is true for vessels positioned for seasonal trades that periodically shift between Atlantic and European routes.

Spot market exposure adds another layer. A vessel that trades opportunistically may not know six months in advance how often it will call at restricted ports. Forward modelling becomes less precise.

Owners must build flexibility into their assumptions rather than rely on static trade patterns. That uncertainty affects how confidently projected savings can be treated as guaranteed.

The economics of an open loop only installation are therefore becoming vessel-specific rather than fleet-generic.

The emphasis on configuration flexibility is already visible in parts of the Northern European market. Norwegian ferry operator Color Line has upgraded several vessels to hybrid capability while operating in Northern European trades, reflecting how discharge optionality is entering practical fleet decisions.

Decision timing therefore becomes material.

Some owners may choose to reassess configuration during scheduled dry dockings rather than commit immediately. Others may accelerate evaluation to avoid being caught by regulatory milestones with limited yard capacity.

The policy timeline does not dictate a single response, but it does compress the window for strategic clarity.

Charter structures add another layer. Where charterers bear fuel costs, the perceived value of a scrubber may be assessed differently from cases where owners retain fuel responsibility.

If a vessel spends increasing time burning compliant fuel in restricted waters, questions may arise over how savings are shared and how fuel performance is benchmarked.

Regulatory Layering and Market Impact

The OSPAR roadmap does not sit in isolation.

Global sulphur limits remain unchanged. Regional discharge rules now overlay them. Implementation may vary by state.

The possible extension to territorial waters remains under review.

The practical footprint will depend on national transposition and enforcement. This variability introduces a new planning dimension.

A vessel may operate freely on the high seas, adjust in coastal waters, and switch fuel entirely during port stays. Each layer affects fuel consumption patterns differently.

For bunker procurement and forecasting, assumptions around HSFO demand in Northwest Europe become more conditional.

Fuel consumption profiles may fluctuate based on trading route decisions, port frequency and regulatory implementation.

It would be overstated to predict a structural collapse in HSFO demand in Northwest Europe solely as a result of OSPAR’s roadmap. The scale of impact will vary depending on vessel type, trading intensity and fleet configuration.

Where fuel operating patterns fragment and utilisation assumptions tighten, financial models lose some of their earlier simplicity.

Static payback projections give way to scenario modelling. Spread sensitivity becomes intertwined with geographic exposure.

The Evolving Scrubber Equation

The scrubber debate once appeared binary. Install and burn HSFO, or avoid capital expenditure and commit to compliant fuel.

Today’s landscape is more complex. Fuel spreads still matter. Charter structures matter. Asset life matters. Regulatory geography now sits alongside these variables.

An open-loop-only configuration continues to deliver value where discharge remains unrestricted.

Where restrictions apply, commercial performance depends on exposure frequency and duration.

Systems capable of operating without overboard discharge in restricted areas provide a more consistent fuel profile across jurisdictions. In practice, that often means moving beyond open-loop-only configurations and towards systems that can maintain scrubber operation across both unrestricted and restricted waters.

This shift is already visible in parts of the Northern European ferry market, where operators such as Color Line have moved towards hybrid capability, with hybrid upgrades becoming part of how fleets maintain scrubber utilisation across changing regulatory environments.

That consistency reduces variability in utilisation modelling.

Fuel strategy, scrubber configuration, and regulatory geography are converging. Where utilisation assumptions change, financial projections need to change with them.

The arithmetic that supported investment decisions in 2019 still applies, but the variables feeding it are shifting.