Wärtsilä: Scrubbers Can Remove More Than Just SOx

Following on from our article in March, TME's Tom Cox sat down with Kashif Javaid, Director of Sales, Wärtsilä Exhaust Treatment, at Posidonia 2022.

How has the year been going for you at Wärtsilä Exhaust Treatment?

There has been a healthy growth of enquiries from the newbuilding market, and with the current fuel spread, the overall economics for scrubbers are strong. The interest in scrubbers has been picking up, so all in all the market has been positive. While there remain positive sentiments, on the other hand there are some geopolitical challenges and some after-effects of Covid-19 which are still there and continue to create some challenges for shipowners.

Touching on the challenges, are you finding any problems sourcing materials for the scrubbers now? 

There have been some global logistics challenges with semiconductors and electric components, but we are sourcing from multiple suppliers, both in Europe and in Asia. But I think the challenges are more related to the retrofit market and the installation side. This is because most vessels are retrofitted in China, and, as you know, the lockdowns have taken their toll and created some uncertainty for the shipowner.

How do you see the current outlook and future of the scrubber market? 

The outlook is positive due to several factors; we know that scrubbers have come a long way from being only a SOX-compliant solution, and the technology has evolved to ensure compliance with potential and impending regulations relating to NOx, particular matter (PM) and CO2. Some of these are not in place yet, but we believe that they will come at some point in the future. For example, we have developed a PM filter add-on, which can be added to the scrubbers. Thanks to the CCS technology we are developing, scrubbers can contribute tremendously to decarbonization, and that alone will allow them to stay in the market for a long period of time.

There are also positive developments on the technology side and on the scrubber itself. For example, we recently launched the IQ Series Scrubber that takes up 25 percent less space, is 30 percent lighter, and has 35 percent less volume, which minimizes the impact on a vessel’s cargo-carrying capacity, and therefore its profitability. There is a huge interest in this new scrubber - especially from the container market - because of its smaller footprint.

There are many things happening with the scrubber itself that are exciting. This is based on our mantra of treating them not only as a SOX solution, but as a platform for future technology development. These include exhaust gas recirculation units (EGR), PM filters, microplastics filters, and soon, carbon capture and storage.

What percentage of the fleet has had scrubbers installed now? 

From the latest reports, we see around 4.2 percent of shipping’s global fleet fitted with scrubbing technologies. There have been a few delays on the retrofit side in the last year, but now we see that the market is picking up again. This is also reflected on the newbuild side, which has been developing steadily over the last year. We also see that there's a clear correlation between the fuel spread and the number of enquires we've been receiving in the last few months.

However, it bears repeating that there remain some Covid-19 related issues in the yards, and also with the current geopolitical situation, which is creating some uncertainty in the market.

There is a strong business case for retrofitting scrubbers. Compared to five or six months ago, shipowners have a better picture of the short-term opportunities. I hope that the second half of this year will be more active in terms of retrofitting contracting, and we expect to see the newbuild market continue to grow quite steadily and positively. All this signifies that there remains a strong demand for scrubbers.

Of the 4.2 percent of scrubbers in shipping’s global fleet, how many of those are Wärtsilä systems?

Being a market leader in marine technology, we have installed or have on our order book a large proportion of our exhaust gas abatement technology on vessels across the globe on both the newbuild and retrofit side. We’re confident that this will continue to grow, thanks to our ability to tackle multiple pollutants with our solutions.

With rising fuel costs, have you been experiencing high volumes of enquiries?

We have received increasing numbers of enquiries in the past few months across various segments, including tankers and containers.

How is the forward order-book looking?

The forward orderbook is looking very healthy. We have several deliveries lined up this year and already for next year, both with newbuilds and retrofits, so it is an exciting and busy time for us.

Has there been any challenges finding yards to install the scrubbers?  

From conversations with ship owners, there are slots available on retrofit yards. We know there is availability but the challenges with Covid-related lockdowns and accessibility to the shipyards remain. This has played a role in some owners’ decision to delay installations.

Another important factor is the freight market, especially for container ships and many owners are considering if it makes sense to take their vessels out of service and put them in the yard, considering what they're earning on those vessels. Tankers on the other hand have not been earning as much in the last months, but there are some positive signs that things will start to pick up. There is a clear business case for tanker vessels with scrubbers due to charter rates.

We believe that in the second half of this year, more owners will have greater confidence in booking retrofit orders. This is based on the discussions we have had at Posidonia, the interest we are receiving from owners, and also the number of enquiries we are receiving for the IQ Series Scrubber for larger vessels. There is huge potential in exhaust gas abatement technology, and the business case is definitely there.

Is there anything else you’d like to let our readers know?

We have talked a lot about the retrofit market, and we want to ensure owners and operators have the confidence today owners to install this technology with its ability to not only safeguard their assets for today's regulations, but to also be prepared for future regulations. 

The ultimate challenge and impending regulation are for greenhouse gas (GHG) emissions, and here we believe that scrubbers can help greatly in reducing emissions in the short term. If we look at alternative fuels, they are not yet readily available to support today’s fleet. We believe that ECGS will be one of the most important decarbonization solutions, and we can assist owners tremendously in cutting their GHG emissions.