Foreship: One Third of Ships Will Use Scrubbers by 2030

Shipowners weighing up their fuel choices after the 2020 IMO sulfur cap may wish to consider oil company expectations that about a third of commercial shipping will gravitate back to high sulfur fuel oil by 2030, according to naval architecture and engineering consultants Foreship.
 
About 100 ships are running on LNG today, and the number will likely stay below 500 by 2020. At the same time, while the 0.1 percent fuel sulfur content limit within ECAs has led to 1,500 scrubber installations, yard capacity could only grow that number to 3,000-4,000 ships by 2020. Most ships will run on 0.5 percent sulfur content HFO to meet the upcoming regulatory cap.

Foreship’s head of machinery, Olli Somerkallio, says that after 2020, 0.5 percent sulfur content fuel will be blended from distillates and HFO. Higher sulfur HFO (HSHFO) can be used as a marine fuel where scrubbers are installed, but could also be a substitute fuel in gas powerplants in former Soviet countries, or as a coal substitute. This will change the pricing dynamic of HSHFO: to compete with coal, prices would have to be relatively low.
 
The implication is that HSHFO will be a low-cost alternative and will likely return to favor as a marine fuel after the dust settles. “This will have a significant impact on the ROI of scrubbers in the future,” says Somerkallio.

Foreship says that it has considerable experience with scrubbers and emissions abatement. “We have faced and overcome a broad range of installation challenges, including the fact that scrubbers eat into the revenue-earning space required for passengers or freight,” says Somerkallio. “We are also very familiar with the equipment options in the market and supplier references.” As well as needing new pumping, water treatment and tank storage equipment, exhaust gas scrubbers demand considerable new pipework on board. Installing inline means that existing silencers need to be replaced with larger equipment, causing a space challenge. 

“Gaining this experience provides a wealth of independent experience that owners of cargo ships can draw on as the 2020 global sulfur cap approaches,” says Somerkallio. “The track record is also long enough to understand that ships within the same project do not always benefit from the same equipment selection.”