Tanker Operator DHT Bets on Scrubbers
Tanker operator DHT Holdings has decided to install scrubbers on 16 existing ships. It has also recently taken delivery of two new Korean-built tankers fitted scrubbers, bringing the total to 18 of the company's 27 ships, or two thirds of its fleet.
The retrofit program covers vessels built between 2004 and 2012, and the candidates selected were the ships that offered the greatest economic benefit from a costly scrubber retrofit.
"We are neither for nor against scrubbers, but deem it our responsibility to position DHT as best as we can ahead of the implementation of the new regulations," wrote co-CEOs Trygve P. Munthe and Svein Moxnes Harfjeld in a joint statement. "We believe scrubbers to be an economical way to comply with the new regulations and want with this communication to share some important details in our scrubber program."
Most of the planned scrubber units will be able to clean the exhaust gas down to the equivalent of emissions from 0.1 percent sulfur content fuel, enabling these ships to operate with scrubbers within emission control areas (ECA) and ports.
In addition, the retrofitted vessels will have fuel tank lay-outs that allow the carriage of several grades of fuels. This will allow the ships to switch to fuel grades with 0.5 percent sulfur (or less) when transiting regulated areas or calling at seaports that do not permit the use of scrubbers. "We have elected this configuration in anticipation of countries implementing stricter rules related to use of scrubbers when ships operate in their respective near seas and ports," DHT wrote.
Fuel flexibility will be useful in Singapore, which recently announced that it will ban the use of open-loop scrubbers in port. Ships with open-loop scrubbers may comply by switching to 0.5 percent bunkers while in the harbor and then switching back to conventional HFO once they have departed Singapore. Since the ban only covers the vessel's time in port, when fuel consumption is low, it is expected to have a relatively small impact on the total bunker cost for a given voyage.
Without scrubbers, higher bunker expenses
Number-two ocean carrier MSC announced Monday that it expects its annual bunker bill will soon be $2 billion higher, driven up by the high cost of 0.5 percent low sulfur fuel oil. To help recover these costs, beginning on January 1, MSC will implement a new comprehensive bunker charge that will replace its three existing fuel surcharges. ECA-related fuel charges will still be assessed on a separate basis.
The charge will be calculated as the cost per tonne multiplied by a "trade factor" specific to the service. Reefer container shipments will be assessed a fuel charge 50 percent higher to account for the extra expense of generating electricity for their refrigeration systems. For now, the fuel cost is based on the monthly average of a standard HFO price index for each trade lane. Beginning as early as the fourth quarter of 2019, it will be based on the price of 0.5 percent low sulfur fuel oil.