SAFETY4SEA: What are the key barriers for the operators to invest in scrubbers?
Nicholas Confuorto: Key barriers in scrubber investment are shipowners’ concerns regarding future regulations and the differential price between low sulphur and high sulphur. It is difficult to predict, but at some point a decision has to be made. If there is nothing that will indicate otherwise, the best suggestion I can make at this stage is put some of those concerns aside, because the scrubber investment is the best investment for the ship right now and if things change in 10 years, adjustments can be made to reflect the change, rather than not do anything at all and then suffer from the higher fuel costs.
S4S: How do you believe the 2020 sulphur cap will impact the market?
N.C.: There will be a large group of companies that will have scrubbers but some will not, therefore the competition between those two parties is going to be an issue. In my opinion, the ones without scrubbers are going to suffer significant increasing costs due to fuel use and that will make them less competitive; in the end, that is going to change the picture of the whole market for the shipping. We are going to see some companies that, because of the increasing costs, are not going to be able to afford new investments and others that have been able to predict this and put scrubbers on, will have significant benefit from the lower fuel costs, which I believe will become a large player because they will have more money to invest.
S4S: What is your forecast for 2025 - 5 years after the initial deadline - with respect to scrubbers’ adoption in the global fleet?
N.C.: This year alone we see a market of scrubbers somewhere in the 1,000 range. By 2020 they could probably be about 3,000 – 4,000 scrubbers installed if they continue at the pace they do this year. That will be the pace I think will continue until 2025 which will change the whole schematic of the shipping industry, in that so many companies using scrubbers will force others to also use scrubbers because of the competition. The difference between what we are seeing now and what we are going to see in 2025 in terms of technology is going to be minimal. The technology of scrubbing systems is already a technology that is 40-50 years old. So the improvements have been made many years ago. What we will see is more companies selling scrubbers in this industry. Therefore, it is not going to be a technology change that we will see in 5 or 10 years. It is going to be a competition change that there will be many more companies selling into the marine industry.
S4S: Do you believe that the industry is ready to comply with the new regulations until the given deadline?
N.C.: The industry at this stage has no choice but to comply. Some will comply with fuel switching, some will comply with scrubbers, and others may comply with other green technology. But there is no option for noncompliance in 2020 as the penalties are too great. For operators who haven’t decided yet my message is that scrubbers work. They have been used for many years and many systems are on ships already. So, they have already proven themselves that they do save money against a fuel, and even at today’s prices at $200 differential, you can still benefit from scrubbing systems. Making a decision to use them for the future I think it is a simple one!
View the video Interview with Nicholas Confuorto, President & CEO, CR Ocean Engineering at SMM 2018, September 4-7, Hamburg, Germany.
The views expressed in this article are solely those of the author and do not necessarily represent those of SAFETY4SEA and are for information sharing and discussion purposes only.