Star Bulk Carriers, the biggest dry bulk carrier on the US’ NASDAQ stock exchange, has committed to adding two dozen exhaust gas cleaning systems to vessels in its bulk carrier fleet.
Chief executive Petros Pappas discussed the decision on Star Bulk’s quarterly earnings call, transcribed on the investment research platform Seeking Alpha.
“We’re proud to say we have installed one scrubber already. And then we are installing our second scrubber as we speak,” Mr Pappas said.
“We have also ordered 22 scrubbers … mainly investing for our bigger vessels, and we will see what we do thereafter. I mean, we will have to see how they work, how the market moves, we’ll see how it goes after that.”
According to the fleet numbers on its website, the 24 vessels to be fitted with scrubbers make up roughly a third of the group’s current fleet.
The news of Star Bulk’s scrubber contract follows shortly after class society DNV GL reported that scrubber fittings had been arranged on 300 vessels in the last three months alone – with the majority in the bulk carrier and container vessel sectors.
Mr Pappas said the “great majority” of the scrubbers ordered for his own Star Bulk fleet would be installed after 2019, with the company’s overall dry dock capital expenditure projected at around US$15M in 2020.
He said that the average costs of scrubber installation in the company’s contracts fell below US$3M and that Star Bulk had secured financing on “around 70%” of the total costs.
When the scrubbers are installed, they will come from European suppliers, he said.
In the meantime, Mr Pappas said the company was putting its one newly installed scrubber system through exhaustive tests.
“We installed it a couple of months ago, and we have been operating it continuously and under as harsh conditions as we can because we want to test the various – the potential problems,” he said. “And up to now, [the scrubber has] operated very smoothly, and we are very happy with it.
Mr Pappas said he views the IMO sulphur cap that is provoking the addition of scrubber technologies on board commercial shipping vessels in a positive light both for the environmental benefits they will bring and because the costs associated with meeting the regulations serve to increase barriers to entry for would-be competitors.