IMO2020: Scorpio Bulkers Says These are the 3 Barriers to Adopting Scrubbers

Friday February 9, 2018

Scorpio Bulkers Inc (Scorpio Bulkers) say there are currently three things preventing a "mature long-term decision" being made on choosing scrubbers as a compliance solution for IMO 2020.

In comments made this week during the drybulk owner and operator's latest earnings call, COO Cameron Mackey named the obstacles as: the potential for change in regulations; worry that scrubber technology is not up to the task; and uncertainty over the relative pricing and availability of different fuels.

"I think it is only a matter of time before these regulators revisit [the] scrubber solution and realize that a scrubber takes emissions and instead of putting them into air, actually puts them into the sea," he said, adding that the risk was not just about changes to the implementation of IMO2020 but also around the technology itself.

"And this, by the way is proven to be true with the recent misadventures in ballast water treatment regulation.

"So number one is we and most ship owners would be naturally quite skeptical that the regulations don't change."

As for concerns over whether the technology was up to the task, Mackey said: "there are tales and case studies of those who have installed scrubbers already in the cruise industry and some of the short sea shipping industry that indicate that this technology, even as it is currently, may not be adequate to address the objectives that the regulators are putting out there."

"The final big risk of course is relative pricing and availability of the different fuels once you get to 2020. So, these three things really stand in the way of making any mature long-term decision right now. I think that probably describes the way most ship owners are looking at this at the moment. It may change as 2020 gets closer, but that's the way is now."

Even so, Mackey said there was still the possibility they may entertain scrubbers at some point, "but these risks are so great that it would be really fool hardy to undertake that type of investment now."

Mackey's comments in the earnings call were transcribed by Seeking Alpha.

While questions linger over the practical side of choosing scrubbers as a compliance solution, what has met little resistance is the notion that they are an economically sound solution on paper.

Last month, Dr. R. Vis, Director, Viswa Lab provided an analysis on the viability of scrubbers for various vessel types.