Paul Fanning asks if the post-2020 case for using scrubbers will be too good to ignore
Speaking at last week’s European Marine Engineering Conference in Amsterdam, Iain White of ExxonMobil gave a presentation that put fuelling scenarios for 2020 into sharp focus.
While he made it clear that there would be no ‘magic bullet’ that would guarantee compliance with the sulphur cap, he did lay out certain economic realities that may underpin the decisions shipowners would make in the interim.
In particular, he pointed out that the arrival of the sulphur cap would see the price of high sulphur fuel oil collapse almost overnight as it became unusable without abatement technologies – ie scrubbers.
Meanwhile, he said, the price of compliant distillates such as Marine Gas oil was likely to skyrocket as demand for potentially limited stocks soared.
The effect of this, of course, would be that those whose vessels were already equipped with scrubbers would be ideally placed to exploit the low price of residual fuels, which would mean a potentially very rapid payback on investment in scrubbers.
Given that the scale of capital expenditure required for scrubbers is the single biggest obstacle to their installation, this seems a strong case for their adoption. As While Mr White did not make any specific recommendations to the audience, he did say: “The economics for scrubbers are going to become very clear in January 2020 – and very compelling.”
This, of course, raises the prospect that those who have invested in scrubbers will find themselves in a position not merely of compliance come 2020, but of significant commercial advantage. Such a possibility could potentially alter the picture significantly in favour of this technology.