Greece-based dry bulk shipping company Star Bulk Carriers Corp. announced intention to equip its entire fleet with Exhaust Gas Cleaning Systems (scrubbers) before the 1st of January 2020 to achieve compliance with the IMO sulfur cap.
Star Bulk expects average cost, including installation, to be below $2.0 million per vessel. The company has secured debt financing with an average margin of below 3.0% to cover up to approximately 70% of such cost and expects the remaining amount to be covered from operating cash flow and cash on hand, without raising equity for this purpose.
The company has also secured contracts with leading shipyards for the installation of these systems, while in approximately 35% of the installations, riding teams are being deployed to carry out the retrofitting works onboard the vessels while at sea, reducing off hire time, as a result of those installations, by 50% to 60%.
A month ago, Star Bulk successfully completed the first scrubber installation at sea.
Scrubber uptake is rapidly accelerating with the number of ships with exhaust gas cleaning systems installed or on order standing at 983 as of 31 May 2018, according to a survey by the Exhaust Gas Cleaning Systems Association (EGCSA).
Meanwhile, several major shipowners, with the most recent example of the Japanese ONE, as well as Danish giant Maersk and Norwegian Jinhui, have revealed intentions to go for environmental compliant fuel ahead 2020, claiming high scrubber installation costs, further feeding the hot industry debate.
