Shipowners hold back on scrubber investments
5th February 2015 13:45 GMT

Lower bunker prices have dampened demand for emission abatement technology.

"Shipowners are holding back from installing sulphur scrubbers on their vessels," according to the energy reporting service Platts.

It said its survey of dirty tanker and dry bulk shipowners had shown that the fall in the price for low sulphur, emission control area (ECA) compliant, marine gas oil (MGO) was a key factor

"We actually installed a scrubber on one of our old aframaxes and we had technical issues with it and the scrubber was almost never used," one tanker owner told the survey.

"Nowadays scrubbers and other technical modifications regarding fuel efficiency are not really a point of interest as the cost of [lower sulphur] bunker fuel is so cheap."

Scrubbers allow ships to meet emission control area (ECA) regulations while continuing to burning high sulphur intermediate fuel oil (IFO).  Since the start of the year the regulations have dropped the cap on sulphur emissions to 0.10%, a move some observers had expected to drive demand for scrubber technology.  The new regulations, however, coincided with a sharp fall in energy prices.

Scrubber manufactures told Platts they remained confident.

Pia Meling, senior marketing and communications manager at Norway-based Clean Marine, said low MGO prices had removed some of the "urgency regarding any fuel cost saving investment".

"We do not expect a decline in scrubber demand due to the low MGO price, but we do expect some delay in the investment decision for the retrofit market," she explained.

"Most shipowners believe that the oil price will increase again later this year, so the current low fuel price [....] is not the basis for their long-term planning and decision making."

Sigurd Jenssen, director of exhaust gas cleaning at Wartsila, told the energy reporting service: "We have not really seen a decline in the demand for scrubbers, despite the drop in oil prices."

He went on: "The driving factor for scrubber installations is the price differential between MGO and high sulphur fuel oil (HSFO) [rather than the absolute price of MGO]."

Alfa Laval this week said it had seen a steady growth in demand for its scrubbers in 2014 and was expecting "an even higher order intake in 2015".

Nick Jameson, 5th February 2015 13:45 GMT

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