The pandemic and oil price wars eroded the business case for scrubbers, but suppliers anticipate an uptick, promising quicker installations and new technologies
Based on several factors – equipment price, installation cost, how many days a ship sails within an emissions control area, the price differential between HFO and MGO, fuel consumption, engine load, etc – scrubbers can be an attractive investment for shipowners for emissions compliance.
Covid-19, however, has disrupted that business case, but stakeholders interviewed by Container Shipping & Trade believe that once the pandemic is under control, orders for scrubbers will rebound. When that happens, the industry will be armed with shorter turnaround times, more advanced technologies, and improved installation processes, say interviewees.
CR Ocean president Nick Confuorto says the cost differential between heavy fuel oil (HFO) and compliant fuel started to narrow at the beginning of 2020, exacerbated by a price war between oil-producing countries. Once the Covid-19 pandemic hit, the price war was replaced by a poor supply and demand balance.
“We were hit by a one-two punch that the scrubber market has yet to recover from,” says Mr Confuorto. “However, once Covid is conquered, I believe the fuel pricing difference will return and therefore the driver for scrubbers will once more lead to new orders,” he says. “The scrubber industry has had a very poor 2020, but I believe there are still many good years ahead once the pandemic is under control,” he adds.
Yara Marine director of sales and public affairs Kai Låtun says there is no business case based on the current price differential between HFO and very low sulphur fuel oil (VLSFO) – which is nearly zero in some areas such as in the US. While he says there is a “huge backlog” of scrubber orders, Mr Låtun says, “Order intake for next year is the big worry.”
Panasia team leader for strategic planning James Seungha Han says there are several reasons why the scrubber market will rebound. He says once Covid is under control and ship traffic rebounds, engine problems faced with VLSFO will need to be addressed. Further, today’s price spread of US$60 in Asian bunker points is unrealistic. “Nobody knows which way it will go. Last year the spread was more than US$200,” he says, adding, “I would say US$120 spread is normal and scrubbers can pay back in two to three years at that price spread.”
Alfa Laval sales director for exhaust gas cleaning systems Steven Pieters contends, however, scrubbers still offer a business case for vessels with high fuel consumption.
Container freight rates are higher and container ships are busy transporting goods for the holiday season. Freight cost is covering the price of VLSFO, says Mr Han. But that market will open up too after the season, believes Mr Han, because ships fitted with powerful engines are intended to run at maximum speeds. Fuel consumption will be high, and a more “realistic” price spread will lead to shipowners reconsidering scrubbers, Mr Han says.
Shipyards improve with experience
While ship newbuild orders are at a historical low, scrubber retrofits are continuing at shipyards, which are also showing improvements in installation times based on experience. Delays were common during scrubber installations in the run up to IMO 2020, Mr Låtun points out. Delays at a shipyard are critical, increasing a vessel’s downtime; if a vessel is not operating, it is not making an owner money.
One lesson learned, says Mr Låtun, is that spares need to be kept at the shipyard in case of damage. Just as important is communication through daily co-ordination meetings, ensuring stakeholders are on the same page – leaving no room for finger-pointing. “Since language can be an issue, using pictures to show how a job should be executed helps,” he adds.
Those delays, however, seem to have been addressed through lessons learned. “Shipyards have come to speed. They now know scrubbers. An open-loop installation including sea trials can be finished in 16 days,” says Mr Låtun, adding, “delays are rare.”
Fragility of the instrumentation has been a problem and CEMS maintenance and calibration on board have been other issues, says Mr Confuorto. “Judging from early scrubber installations, I can say that during 2019-2020 shipyards have significantly improved their scrubber installation capabilities,” he says.
“As we learned more and more about what better fits in funnels, we began offering multiple designs such as our addition of square towers (instead of the usual round towers) and side inlet towers to our offering. Additionally, we started to supply remote monitoring of the system operation,” says Mr Confuorto.
Corrosion has not been as much of an issue as was feared, says Mr Låtun. Drain lines can be made from glass reinforced epoxy and the overboard outlet has to be especially corrosion-resistant. Yara Marine recommends that the overboard be well aft of intake and an elliptical area of 1 m by 2 m be covered with glass fibre flake to protect the hull since the discharge water has a very low pH. “We recommend that the words ‘Do not blast’ be painted in big bold in that area so the fibre protection is not blasted away in the next drydock,” he adds. “The three stakeholders – the integrator, who is the redesigner, installer and vendor – have to work together on a common plan,” says Mr Låtun.
Offering ease of installation, Alfa Laval introduced the PureSOx Express in June, says Mr Pieters. This is an open-loop PureSOx system, but one delivered as a fully enclosed module. Adapted for a simple and cost-efficient fit on smaller vessels, it reduces the investment cost, engineering time and physical work of installing a SOx scrubber.
It can be lifted on board and connected without a specialised scrubber team, says Alfa Laval, which means less work at the shipyard and an installation time of just 10 to 14 days.
Installing scrubbers and BWTS at the same time
It has become a common practice to install ballast water treatment systems (BWTS) along with a scrubber when the ship goes to the yard to cut cost and downtime.
“The most important element is space availability if the owner wants to install a BWTS and scrubber together,” says Mr Han. “If vessel is more than 15 years old, it would not have been designed with a BWTS in mind. If the scrubber is installed in addition, the owner should consider stability impact, inclined test, and other naval architecture aspects like LWT, VCG, LCG and so on. If these changes are not considered and discussed, a panic situation may arise during installation,” Mr Han cautions.
The pandemic has taught the importance of offering remote service and local presence, says Mr Pieters, pointing to Alfa Laval’s global network. Flying in skilled engineers to yards is now a problem for scrubber suppliers. Having local talent in their ranks has been useful, says Panasia’s Mr Han.
Regarding operation and maintenance, Mr Låtun says ship staff are quite well versed with routine maintenance on scrubber systems since it involves work on typical shipboard parts and equipment such as valves, gaskets, pumps and so on. In addition, sensors in gas analysis and water quality assessment need to be changed every year. When port state control calls, ship staff need to be able to demonstrate they have been compliant.
Scrubber operation is automatic, but the manual mode may be needed when carrying out maintenance on the pumps. “Covid has introduced a complexity in that crew change is done very quickly and there is not much time for a proper handover,” says Mr Låtun.
Using wet scrubbers to reduce emissions in port
Chairman of the Exhaust Gas Cleaning Systems Association Don Gregory says in a Covid world, ports, harbours and port authorities remain behind the curve on improving local air quality.
“There is simply a lack of priority in tackling pollution sources in their jurisdictions,” says Mr Gregory. “As studies proceed on the cohorts most impacted by Covid 19 and those groups who when catching the disease often suffer fatal consequences, it is becoming apparent that a history of poor air quality is a major if not defining key causal factor.”
Mr Gregory adds “The question becomes what are the quick wins that ports can implement to reduce air pollution? Well one that has been handed to them on a plate thanks to IMO Marpol Annex VI regulation 4 is the use of wet scrubbers to not only reduce the emission of sulphur oxides, but also the emissions of fine particles related to fuel combustion and cylinder oil. Some recent data shows that not only do scrubbers reduce (but not yet eliminate) toxic compounds entering the atmosphere, the toxicity of the scrubbed gas is somewhat less than those ships that switch to low sulphur fuels to meet the requirements of regulation 14 of the same Marpol Annex.”
He says “Instead of ports denying the use of wet scrubbers in ports, the science indicates that using scrubbers provides a really quick win in terms of reduced toxicity in the air of the port and an overall well to wake reduced CO2 footprint.”
Ports have focused on open-loop scrubbers as bad actors, contends Mr Gregory. “They have cited that the use of open-loop scrubbers can result in deposits in the port area sediments making the disposal of future dredging materials more difficult. But Mr Gregory contends this is not borne out by studies. He says the Port of Rotterdam Authority has probably had the longest experience of the use of open-loop scrubbers with discharge into the port waters. “Their extensive studies have not indicated cumulative harm from scrubber operations which started in the late 1960s,” he adds.
Wash water treatment systems
As far as restrictions on wash water discharge by ports is concerned, for Panasia, it is a potential market. As a supplier of wash water treatment systems and hybrid scrubbers, it expects a new retrofit market to come up, especially if IMO mandates are put in place. In such cases, wash water treatment systems will be retrofitted to existing open-loop scrubbers of other suppliers. Mr Han says 10% of open-loop scrubbers may be retrofitted with a wash water treatment system.
Mr Confuorto says a backend water filtering system could be a solution and points to a partnership that CR Ocean has forged with Oberlin Filter.
With the risk of wash water discharge restrictions, it pays to install hybrid-ready open-loop systems, says Mr Pieters.