Tanker operators that have invested in scrubbers need to protect that investment in the court of public opinion as well as post-2020 enforcement
This week has seen significant developments in the tanker sector regarding the IMO 2020 global sulphur cap. The first was the pronouncement on scrubbers from Euronav. It is entirely unconvinced on the financial benefits of fitting scrubbers (although remains committed to fighting climate change). For a company like Euronav, with 69 tankers in the water, including 41 VLCCs with an average age of five years old to emphatically reject the notion of fitting scrubbers is a huge blow to scrubber manufacturers.
The second significant development was there was no pushback from scrubber manufacturers or those tanker companies that have already invested in scrubbers. As far as I am aware, there has been no issue of press releases or comments in the trade press refuting the arguments put forward by Euronav. Maybe they are saving them up for when Euronav chief executive Paddy Rodgers speaks at the Tanker Shipping and Trade conference later this month.
The third event with a less direct significance in this area was the arrest of the administrator of companies accused by the Italian tax authorities of avoiding VAT payments on fuel smuggled into Italy via Malta. Apparently 29M litres of fuel oil was smuggled through Maltese waters and even transferred within the Grand Harbour at Valletta without any arrests being made by the Maltese authorities. For such a blatant operation to take place in full view suggests that when IMO’s global sulphur cap comes into force in 2020, there will be minimum enforcement of the new rules on fuel.
The enforcement of the global sulphur cap is one of the three objectives behind the formation of the Trident Alliance, which currently has 46 shipping company members. These include tanker companies such as Maersk Tankers, Nordic Tankers, Scorpio Tankers and Ardmore Shipping to name a few. Being a member of the Trident Alliance does not automatically mean your tankers are fitted with scrubbers, but some like Scorpio Tankers is known to be investing heavily in the technology.
Therefore, it seems to me these tanker companies could be a sub-group within the Trident Alliance and include ‘non-aligned’ tanker operators to form a ‘Scrubbers Collective’ to speak in one voice when faced with announcements such as Euronav's. In the post-2020 era, this could be developed into a soft commercial pool to be a one-stop shop for charterers looking for scrubber-equipped tankers.