Quadrise Remains Upbeat on Scrubber Uptake

Mike Kirk, Chairman, Quadrise Fuels International plc. Image Credit: Quadrise

UK-based Quadrise Fuels International plc [AIM: QFI] (QFI) has delivered an upbeat outlook on the uptake of marine scrubbers as a choice for IMO2020 compliance, and in turn the prospects for its emulsion bunker fuel, MSAR.

In particular, QFI said the case for scrubbers would get a further boost following the International Maritime Organisation (IMO)'s recent backing of a carriage ban on high sulfur bunkers as part of efforts to ensure compliance with IMO2020.

"This policy change, when approved by the IMO later this year, will mitigate some of the concerns regarding IMO 2020 non-compliance. This development is already impacting the forward price differential between gas oil and fuel oil for early 2020 which has now increased to $325-$350/t, further improving the economics for both MSAR and EGCS opportunities," Chairman Mike Kirk wrote in a statement accompanying the firm's recent half year report.

"Whilst there will be a mix of compliance options, Quadrise and many market analysts continue to believe that high sulphur fuel and on-board EGCS will be the lowest cost option, although at this stage only a small number of operators have confirmed their position. Recent extensions of Emission Control Areas to ports in China, Hong Kong and Taiwan are reportedly driving interest in EGCS solutions in Asia."

Exhaust gas cleaning systems (EGCS), more commonly known as scrubbers, allow ships to burn otherwise noncompliant, high sulfur bunkers by achieving an equivalent method of compliance.

Despite the apparent economic benefits, their adoption to date has been well below expectation.

While QFI's MSAR process can technically produce inherently compliant 0.50% sulfur emulsion bunkers, the value proposition lends itself more to the production of a higher sulfur product.

Maersk, who had been trialling the MSAR bunkers as part of a scrubber-based solution, ended the project last year after deciding they would only burn low sulfur fuels to comply with the new IMO2020 rule.

Still, the trial was otherwise declared a success, and in the half-year report Kirk said the firm had seen "increased engagement" with prospects in the marine market.