Niels Rasmussen, chief delivery analyst at BIMCO has been crunching the numbers on the proportion of ships fitted with exhaust fuel scrubbers, or exhaust gas cleaning systems (EGCS) extra formally.
“Scrubbers were installed on 399 ships in 2022, a fall of 24% year on year, and currently 13% of bulker, container, and tanker ships have a scrubber installed,” he says. “Despite the slowing rate of installations, the share of ships with a scrubber is set to increase in coming years as 17% of ships on the shipyards’ order books are expected to have a scrubber installed.”
Since a January 1, 2020, deadline, IMO laws imply that ships have had to make use of extremely or low sulfur gasoline (ULSFO or VLSFO) to adjust to limits for sulfur emissions. However, ships can proceed to make use of the cheaper heavy gasoline oil (HFO) in the event that they set up a scrubber. But the value premium for VLSFO has turned out to be lower than initially estimated.
On December 31, 2019, the day earlier than the brand new IMO regulation was applied, the value premium for VLSFO over HFO in six of the world’s largest bunkering ports averaged $347/tonne. Since then, the premium has averaged $149/tonne. It has been as little as $50/tonne for an prolonged interval throughout 2020 and as excessive as $400/tonne throughout June/July 2022.
“The higher the VLSFO premium, the more attractive the investment in a scrubber is because the payback period is shorter,” says Rasmussen. “The lower-than-expected VLSFO premium has likely discouraged owners from installing scrubbers, particularly on smaller ships with lower bunker consumption and lower savings as a result.”
In truth, the common dry bulk, container, and tanker ship with a scrubber has a deadweight capability of 140,845 tonnes whereas these with out have a median of 51,743 deadweight tonnes.
Therefore, the 13% of the dry bulk, container, and tanker ships with scrubbers represents 29% of the deadweight capability. The crude tanker fleet has the very best set up fee with 32% of the ships and 38% of the deadweight capability having scrubbers put in.
The proportion of ships with scrubbers is ready to extend within the coming years as 17% of the dry bulk, container, and tanker ships within the shipyards’ order books are anticipated to have scrubbers put in. However, these 17% solely quantity to 24% of the deadweight capability within the order e-book and the scrubber deadweight proportion may subsequently lower.
“In the long term, the use of scrubbers to cut sulfur emissions may reduce as decarbonization efforts will increase the use of alternative fuels that are sulfur compliant,” says Rasmussen.
