DFDS operates one of Europe’s largest integrated shipping and logistics networks, offering comprehensive supply chain and shipping solutions to customers. DFDS is in the forefront of scrubber retrofit actually because we have some good background for doing that. We own a number of the ships we operate and therefore, we are able to control the long-term deployment and have knowledge of our activities inside the SECA. We have the money, and don’t underestimate this because you’ll find it very difficult to find financing for scrubbers, it does not really add to the value of a ship and financial institutions intend to like some kind of collateral, however your ship value will not increase. We also think that the scrubbers are better than MGO for the environment so we have a next top added benefit here.
In the past, we installed the first system already back in 2009, we installed three more last year, we’ve also installed one already this year, we actually have two ships in dry dock right now to be installed with more scrubbers and in total this year we will do seven and will probably do another seven in 2015. We have set aside about 100 million Euros for this investments, so by the end of 2015 about 20 of our ships will have a scrubber installation.
We’ve elected wet hybrid scrubbers and the reason for that is the legislation which is not really clear on open and closed loop. Typical scrubber installation adds 250 tonnes to the ship, a lot of the weight high up in the ship affectiong stability . Real numbers for 20-40 MW engines show its cost up to 10 million euros per ship all included making its payback a little bit longer. As we have installed theses scrubbers on many of our vessels, to our experience, we would say that it works! The performance is good, we have the added benefit of a lot of the Particular Matters also been removed, that’s another environmental benefit. It takes time to commission, we had the first one installed in 2009 and we’re basically still testing it. It is true that we had problems, for example we had almost three fires on the first ship, so it is really something you have to keep an eye on. It is not a plug-and-play solution, each ship is unique and each installation is unique as there are no sister ships benefits here. It does not work for all ships either because of the age or their trading. It does require additional power; we spend about 1.5% percent additional fuel to operate the scrubber which is not good for the CO2. Chemicals were quite expensive when we operated in closed-loop. Also, the system takes up space, increases the GT of the ship and therefore increases the port expenses. And then we have the whole problem about open and closed loop – where we can operate which. It is an unclear area where we really hope for some clarifications in the years to come. Graph below shows the actual experience on a voyage of Ficaria Seaways. The red dotted line is the maximum emission allowable, the yellow is engine output. As you can see, the entire voyage is significantly below the legal requirements from 2015. So that’s a really good experience.
From our crew experience, there is need for a lot of maintenance cleaning, adjustments, a lot of interaction with the manufactures on how to adjust the system, adding up chemicals etc. The fuel change over procedure can be a little bit tricky. There is a higher load on the aux engines. There’s a problem with backpressure as there’s risk of increased turbocharger wear. So, there are definitely some issues that we find solution and we are always aware. Also, the people around the port did not like white smoke and we had to explain there was actually a sign that this was working because it was water vapour but that’s how you have to fight perception.
In order to have a look at challenges ahead allow me to take you five years forward and to tell you my personal view on things in 2019. So, in 2019, I am fairly convinced that IMO decided to postpone the implementation of the global ECA’s for five years so we now have 3 areas in the world; the 0.1% , the 0.5% within the EU limits and there then we have the rest of the world for the next five years. We have introduced the ballast water management system and yes they did find a tax for the MRV and CO2 after the first set of figures for 2018 where submitted. NOX, Tier III just have been approved and there was also a compromise basically kicking the whole issue out to the regions to decide. For the North Sea, I forecast that nothing really has been decided, Russia is still against. No doubt there is an extensive cheating with the fuel in emission controls. There are also some problems in the supply chain for scrubber fuel as we need heavy fuel oil and the suppliers are fearful of a contamination of the supply chain and therefore it’s difficult to get high sulphur fuel delivered in a number of ports. Because of all the uncertainties in 2019, a limited number of scrubbers have been installed. The 2020 deadline is what everybody is waiting for and that’s still an open item. Because of that in our industry at least in the RORO, the ferry industries there has been no new buildings, it is very uncertain when it would take up again but it’s definitely depressed. We’ve seen a lot of closures and mergers, the sulphur directive have killed business, it has moved business around within Europe, more road transport, new transport corridors, it was not predicted but it has come. Modal back shift has been discussed in a number of different reports, they all got it wrong, it’s a lot more because what has not been taking into in any of the reports done is the fact that you may lose 10 % of your business because of cost increases, that 10% loss of your business will close your service and, therefore the other 90% of the business also has to move. That’s something that has not been included in any model so far, Anothercourse, is that some of the sourcing has moved away from Europe to other countries now being transported into Europe on ships burning 3.5% sulphur fuel. In Europe , we cannot produce more MGO and all the additional MGO needed in Europe has to be imported; again an effect on the balance sheet and indeed on the transportation cost and the emissions related to that. For a number of reasons gas oil is more CO2 heavy to produce, to transport and of scrubbers also burn more fuel. Targets for the EU white paper where 30 % of the long haul road business had to move to short sea shipping will be a long way away in 2019, because what we have done in the past five years is actually the opposite. May sound negative but I think that’s the way it is. A lot of money is going to LNG, EU money I think that in five years time they’ll be under utilized in line still waiting for customers. So that’s my vision and our experience with the scrubbers.
Above article is an edited version of Poul Woodall’s presentation during 2014 GREEN4SEA Forum
More details may be found by viewing his Presentation video
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