Choosing the Best IMO 2020 Compliance Route a Gamble, Says P&I Club

IMO 2020 compliance a gamble, says P&I Club. File Image / Pixabay

Whatever route a shipowner picks for IMO 2020 compliance, it will still be a gamble with the outcome heavily dependant on future fuel prices in 2020 and beyond, North P&I says.

As has been discussed at length in these pages, the wider the differential between HSFO and 0.50% sulfur bunkers, the more attractive investing in scrubbers becomes as the technology will allow vessels to continue burning otherwise noncompliant HSFO after the global 0.50% global sulfur cap comes into force from January 1, 2020.

North P&I says if that differential gets to $400 per tonne in 2020 then installing exhaust gas cleaning systems (EGCS) "looks like a very attractive option."

Veteran industry expert Rudy Kassinger has previously told Ship & Bunker that such a spread is not only entirely realistic but "a best case scenario."

Still, despite the seemingly slam dunk economics and surge of recent orders, the P&I Club says there is still plenty of caution and misunderstanding over the technology.

Indeed, despite the positive headlines and 983 vessels either slated for scrubbers or already have them installed - according to EGCSA numbers as of the end of May - the total still lags far behind the 3,800 vessels experts originally predicted would feature the tech by 2020.

To address some of the uncertainty, the Club has posted a Q&A with Exhaust Gas Cleaning System Association (EGCSA)'s Don Gregory and Mark West to help answer some of the common questions and misconceptions the industry has about scrubbers.

The Q&A can be read here:
http://www.nepia.com/insights/signals-online/ships/egcs-do-they-scrub-up-well/egcs-do-they-scrub-up-well/