Ship Finance International (SFL) announced that it has agreed with a customer to install exhaust gas cleaning systems (scrubbers) on a total of seven vessels ranging in size from 8,700 to 10,600 TEU.
The charter period has been extended on some of the vessels, resulting in an increase of more than $160 million to its fixed-rate charter backlog.
In addition, several other of SFL’s container vessels will have scrubbers installed for the charterers account.
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In light of the approaching IMO 2020 sulphur cap, Bloomberg suggests that in the following years about 2,200 vessels are to install scrubbers, as if they don’t they will be banned. DNV GL states that putting all those vessels in a line, they’d stretch about 340 miles.
Concerning scrubber installation, Mr. Christopher Fee, General Manager – Environment and Sustainability, Oldendorff Carriers, presented experience feedback from the use of scrubbers so far. Given that vessels will be able to keep using today’s cheaper fuel by installing scrubbers, many carriers will be put out of service for a long time for refits.
Yet, although scrubber installations will benefit the shipping companies, the logistics may be a challenge, according to Bloomberg. From 3,000 vessels expected to have the equipment installed by the end of the year, two companies account for almost a third of those volumes: Wartsila and Alfa Laval AB.
Jonathan Chappell, an analyst focusing on marine transportation equities at Ecercore ISI noted that although it’s too early to see an impact on the freight market now, because most of the work is yet to be done, rates are nonetheless likely to rise when the installations ramp up and vessels go off-hire.
