It may take more than the few weeks that have so far passed before the full impact of the IMO 2020 fuel changes can be recognised but on the face of it those owners that opted for scrubbers would appear to have been the early winners.
A great deal of the advantage of scrubbers came not so much as a result of their being inherently better but because of the political tensions involving the US and Iran after the drone stroke on an Iranian military leader and the subsequent response by Iran. It is a sad reflection on politics that what could have been an increasing chain of tit for tat reactions, was only brought to an abrupt halt by the accidental shooting down of a Ukrainian passenger jet. Up to that point crude oil prices were beginning to soar but have dropped back since.
That spike in prices produced the inevitable increase in price for marine bunker fuels of all types and with it an increased premium for new 2020 compliant fuels over HFO. A near $300 differential between HFO and 2020 compliant fuels is a powerful argument for scrubber advocates and some things look to be moving more to support them.
It was once thought that only a small number of vessels might adopt scrubbers and that consequently bunker suppliers would gradually withdraw support from HFO leading to its eventual demise. The latest analysts’ reports might be changing that viewpoint. Currently scrubbers are fitted to around 12% of the world fleet by tonnage but the figure is increasing. Many now expect it to hit at least 20% of the fleet by tonnage. That figure is very close to the market share once held by distillates and, if you consider that distillates encompasses both MDO and MGO, then going forward the market share of HFO will exceed what used to be for MDO and MGO. That smaller market share was never an obstacle to obtaining those products so neither should it be for HFO in the future.
It was once assumed that scrubbers were a solution only for large vessels and the limited space available on smaller ships precluded their use. Dutch scrubber maker Value Maritime (VM) may not have the market share of the bigger players but its plug and play system is beginning to attract orders and as intended they are coming from small ship operators with the latest being an 8,000dwt vessel.
So far VM’s support has come from local owners only but if it can engineer a breakthrough into a wider market and its technology is proven to be robust then there would seem to be no reason for it not to take off on a bigger scale. Since small ships have traditionally run on distillates, a development such as this would be game changing.
Scrubbers received another boost in January albeit from an unexpected source. With the IMO’s PPR 7 meeting in February due to discuss further the impact of Black carbon on the Arctic environment, Finland and Germany would look to have dropped something of a bombshell with a joint paper describing research undertaken with funding from the German Environment authorities that suggests VLSFO developed to meet the IMO’s 2020 sulphur rules actually produce more of the stuff than conventional HFO.
The paper covered research done by two academic organisations in conjunction with DNV GL and MAN Energy Solutions. It concludes that many of the new 2020 compliant fuels contain high levels of aromatics. They have no problem in meeting the 2020 SOx rules but the level of aromatics means that Black carbon and PM is increased.
The point has already been made that the 2020 rules may reduce SOx emissions, but they do little for reducing the three substances mention in MARPOL VI CO2, PM and Black Carbon) but not yet regulated. Scrubbers on the other hand allow for SOx rules to be met and also reduce both PM and Black carbon emissions.
Exactly by how much is a matter of debate. Many scrubber makers say that the figure is around 80% but the IMO in its 2015 publication INVESTIGATION OF APPROPRIATE CONTROL MEASURES (ABATEMENT TECHNOLOGIES) TO REDUCE BLACK CARBON EMISSIONS FROM INTERNATIONAL SHIPPING puts the figure at a maximum of 60% and probably nearer to 50%. That said, the research used for that publication was already some years old and was quite likely done on first generation scrubber technology.
The report also considered that scrubbers were not cost effective as a means of reducing Black Carbon. On that basis the authors of that report may be correct, but scrubbers are not installed for that purpose alone and their main role is to permit continued use of HFO. The use of HFO in Arctic waters is a vert different matter of course and one that should be decided on different criteria. Nevertheless, having covered NOx and SOx, the IMO will soon be moving to control PM and other emissions.
It would be ironic if the next requirement for ships is for some method of reducing these emissions that could involve installation of a scrubber or a Diesel Particulate Filter (DPF) another technology considered in the mentioned report. The DPF is described as an immature technology and one that is not without problems an increase in fuel consumption and a large footprint are mentioned. Reference was made to a trial carried out by MOL on DPF where the space requirement was two to three times engine volume.
It should be said that the IMO’s 2015 report probably came down more in favour of LNG than for abatement technology and of course if shipping ever does move to carbon free fuels, then scrubbers and black carbon removal will probably be obsolete in any case. Most believe that that day is some way off at the moment and shipping will have to continue to face the emission reduction problem for several years to come yet.