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Owners face 'a no-win situation' to decarbonise fleets
Rising newbuilding and tug upgrade costs, and shrinking vessel availability on the secondhand market, is pushing owners into a tough situation with no efficient solution
Tug owners must reduce emissions from vessels to meet tightening environmental regulations, but cannot find solutions without spending millions of dollars.
Owners have tough choices when it comes to emissions reduction and fleet renewal – pay tens of millions of dollars for newbuild tugs, purchase secondhand vessels and be prepared to upgrade them, or retrofit existing assets.
However, according to a tug-specialist broker in the US, Marcon International, the availability of secondhand tonnage has slumped 23.4% in a year, down to 242 vessels as of the end of May 2024, from 316 in May 2023. That is 55% less than the 534 available in May 2019.
“The market for tugs of all sizes has been very tight for a while,” said Marcon in its latest tug market report. “With the current elevated newbuilding costs, owners are not interested in selling, but are instead trying to refresh equipment, renew certificates or otherwise get laid-up vessels back into working shape to meet commitments.”
Newbuilding costs have doubled in the last 10 years and capital expenditure is even higher for tugs built with hybrid propulsion or other technologies for cutting emissions, such as selective catalytic reduction units for minimising NOx and diesel filters for removing particulates.
“On top of the already tight market, owners in states implementing tighter emissions restrictions are facing even more challenges as increased machinery costs and limited shipyard space are causing issues with keeping tugs working. Many owners are faced with a no-win situation,” said Marcon.
Upgrading existing tugboats or those purchased from the tight market will also be costly.
“For those tugs which are offered for sale, they are few and far between at premium prices,” said Marcon.
“Tugs for sale generally will need extensive steel work and machinery upgrades, and these costs are very difficult to predict with the spiralling shipyard costs being hit by rapidly rising labour costs, and supply chain interruptions these past few years.”
Of the 242 tugs on the global secondhand market, just 26, representing 10.7%, were built within the last 10 years or are newbuilding resales, whereas 44 (18.2%) are over 50 years of age. Three of those are over 75 years old, with the oldest identified by Marcon being built in 1944.
Of the 242 tugs on sale in May 2024, 72 were in the US, 30 in Europe, 29 in the Far East, 22 in the Mediterranean, 21 in southeast Asia, 18 in the South Pacific, 17 in Latin America, 12 in the Caribbean, nine in the Middle East, four in Africa and eight elsewhere.
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