Scrubber Manufacturer Yara Shifts Focus After Tech's Business Case "Substantially Weakened" by COVID-19, Oil Price Drop

by Ship & Bunker News Team
Tuesday August 4, 2020

Yara Marine Technologies, a major player in the marine scrubber space, has announced it is shifting its focus to other technologies as the business case for exhaust gas cleaning systems (EGCSs) dwindles in the era of COVID-19 and low oil prices.

"We had high hopes for the scrubber market in 2020, but Covid-19 changed all that," says Shyam Thapa, Yara Marine Innovation Manager.

"Travel and distancing restrictions made it difficult to do business, and the resulting fall in oil prices weakened the scrubber case substantially."

Orders for scrubbers boomed in the run up to the IMO 2020 0.50% sulfur cap, with ship operators widely expected to be paying a premium of $200/mt or more for compliant fuel.

Scrubbers would give owners a route to continue using less expensive HSFO fuel and - as tanker owner DHT put it - the promise of "super profits" as a result.

"Not unexpectedly, stakeholders stepped back toward the end of 2019 to see how regulations were going to be enforced and get a feel for fuel availability and price. Once the situation became clear, they would adjust their plans and proceed with the next steps toward emissions abatement," Yara writes.

Ina Reksten, Yara Marine Technologies COO, adds: "We never got the chance to see how things would have developed before the coronavirus crisis hit. Those that had invested in scrubber technology were happy, but Covid-19 has overshadowed everything since.

"It hit our core customers, so it has hit us."

Yara was one of the so-called "big three" scrubber players who, along with Wartsila and Alfa Laval, at the start of the scrubber boom in 2018 collectively held around 75% of the entire market.

Looking ahead, Yara says it will now focus on alternative maritime technologies.

"We had adopted a new mission," says Reksten.

"The focus is on what we call 'close to core' technologies, in the intersection between green and maritime."

Yara Marine says it was always planning to expand beyond scrubbers. The difference is that now that mission has become its top priority.