Now that the IMO2020 standards, introducing content limit sulfur in the fuel from the current 3.5% to 0.5%, enter into force in only 2 months, will shipowners placing scrubber orders in Clean Marine have a chance to install them before January 1st. 2020?
In regular mode, the length of the project from acceptance of the order to installation and testing on the ship and full certification is about 6 months. In addition to our standard project execution time, it is important to remember the restrictions faced by the ship’s operator in the form of vacancies in shipyards, order time (by shipyards) and the supply of necessary materials (GRE pipes, pipes, valves, etc.)
Note: Now that Clean Marine is in the process of merging with FMSI we are able to deliver scrubbers within 2 months from the order is placed by the shipowner.
How many systems have Clean Marine installed this year and for which shipowners?
This year, Clean Maine has accepted an order for 145 scrubbers, some 50 projects are completed, the majority of the rest will be completed by the end of this year. Among our clients are Norwegian companies such as Hansa Tankers and Inventor Chemical Tankers AS (ICT), which purchased scrubbers for seven chemical tankers with a capacity of 19900 DWT, but our clients also come from countries far away from Norway, such as; American Dorian LPG, Singapore’s Eastern Pacific Shipping, Korean Samsung Heavy Industries, and SK Shipping, and Monaco Scorpio Tankers.
Are scrubbers installed on new vessels immediately during construction in the shipyard or already in operation?
Scrubbers are installed on both new units and so-called retrofits (i.e. ships in operation).
What are the average costs of adapting the unit to IMO2020 standards?
It depends on the size and type of scrubber, size of the ship, placement of the yard doing the installation work. A typical range could be EUR 2,5 – 4 million.
Did the need to meet the new standards cause changes in the shipowners’ market in terms of their market share?
Global shipping emissions will be limited to 0.5% Sulphur content in 2020 and up to 0.1% – mostly in the territorial waters. In short, there is no way of changing the ship’s operation profile to omit the rules. The only option is to comply with regulations or leave the market. As for the future, whether any shipowners will go bankrupt because of this is too early to forecast. It can be assumed that in about 5 years’ time we can see how IMO2020 has affected the shipping market.
What costs will be incurred by shipowners who fail to meet the requirements? Will such ships be able to operate at all?
No, non-compliant vessels will not be able to operate, the only options available are changing to compliant fuel or installing and operate a certified EGCS (scrubber system).
What are the pros and cons of installing scrubbers compared to other methods of meeting IMO 2020 standards?
The main advantage of installing a scrubber is the control over the cost of operating the ship for the shipowner. Shipowners who do not install scrubbers will depend on the availability and price of fuel meeting the requirements, both are uncertain for the time being.
Which EGCS is currently the best?
Different types of scrubbers are optimal for different types of ships. Clean Marine scrubbers are designed for medium and large tankers and bulk carriers. One of our newer projects is the hybrid CleanSOx Compact Hybrid Allstream. The system allows the purification of exhaust gases from all sources onboard ships, without back pressure in the exhaust system. Its compact design has significant benefits in terms of size and weight, and thus also the costs of the installation and modernization compared to alternative solutions on the market. We also have a so-called open deck scrubber, which is over two-thirds lighter than the typical solutions. For the ship operator, this means significant savings in investment outlays on the scrubber itself, without having to reinforce the ship’s structure prior to installation. Installation time is also reduced from five weeks to three weeks, thus reducing docking costs significantly.
Note: When the merger between Clean Marine and FMSI is finalized we will deliver two additional scrubbers which are covering the entire spectrum of the vessels in the market.
Is Clean Marine also involved in reducing nitrogen oxide emissions from ships?
In the long run, Clean Marine is looking at additional technical options to reduce particulates and nitrogen oxides from HFO combustion. We expect a greater emphasis on reducing the emission of nanoparticles and black carbon, which are also present in the combustion of fuel meeting the new standards, and even gas. We have started research and development activities to satisfy this potential future market. The goal is to eliminate all emissions of environmentally hazardous gases arising in maritime transport, thereby reducing the diseases and premature deaths caused by these emissions. It is worth remembering that their number in 2010 was estimated at 50,000 across Europe annually. The latest research by Dr. Elizabeth Lindstad, the main scientist from the Norwegian research organization SINTEF Ocean (Stiftelsen for industriell og teknisk forskning – Industrial and Technical Research Foundation), showed that the use of HFSO in combination with a certified scrubber to eliminate exhaust gases is the most environmentally beneficial way of achieving targets for reducing greenhouse gas emissions, even considering LNG as an alternative fuel.
Are the environmental consequences of the discharge of water into the sea used to absorb sulfur oxides investigated?
Such studies have been conducted since the 90s. They clearly indicate the absorption of sulfur oxides by the marine environment. Details of desulfurization in combination with seawater were presented by Svein Ole Strømmen and Frank Hjelm in the article entitled “Sulfur in flue gases can safely be absorbed by seawater and returned to the oceans” published in 1993 in the magazine “IChemE Symposium Series” issue 131. They indicated that 10% of salt in seawater is sulfate. It is its natural element and is necessary for marine life. Because seawater is the main reservoir of sulfur on Earth, sulfur has penetrated into fossil fuels from the water. The process that occurs in scrubbers, therefore, fits into the natural cycle of sulfate transmission in nature and does not threaten the marine environment. Strømmen and Hjelm describe research on water, marine fauna and flora carried out by the Department of Fisheries and Marine Biology of the University of Bergen in 1989-1991 in the area of the discharge of seawater from scrubbers to one of the Norwegian fjords, carried by the Statoil refinery. Water that absorbed SO2 in the scrubbers was discharged to the fjord in quantity of 25,000 m3/h. Water and benthos surveys were carried out before discharge, six months later, a year later and 18 months later. No changes were detected in water, sediment or living organisms. No increase in the presence of heavy metals was observed either.
Clean Marine’s revenues have increased from EUR 140,000 in 2017 to EUR 150 million in 2019. Aren’t you afraid that after January 1st. 2020 there will be an equally dynamic decline caused by adjusting units to new standards?
We expect a steady flow of orders related to both new construction and continuation of orders from shipowners who have not been able to complete the orders or will not be able to accept the price of fuel meeting the requirements. Of the 70,000 existing vessels, only about 4,000 are currently equipped with scrubbers. This presents a wide potential market. The Exhaust Gas Purification Systems (EGCS) market should continue to be strong over the next 3-5 years, as the price difference between high sulfur (HFO) fuel and standard fuel should remain at current levels or even increase due to increased demand due to new standards. Therefore, scrubbers are a very economically interesting option for shipowners. Therefore, Clean Marine plans a stable income at a level close to the highest level currently achieved in the current year.