The Swedish Club published the report ‘Sulphur Guide’, to provide technical and legal advice to the shipping industry to comply with the 2020 sulphur cap. It analyzes technical considerations when making the decision between operating with low sulphur fuels and retrofitting scrubbers and explains the implications, both in terms of compliance and in relation to the terms of any charterparty in place.
On 1 January 2020 vessel owners must have already decided to either install scrubbers or burn low sulphur or alternative fuels. However, the cost implications of any decision will be difficult to predict.
Right now, vessel operators have two choices:
- Install scrubbers;
- Burn low sulphur or alternative fuels.
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Nevertheless, the Swedish Club says that there are some considerations that need to be considered before deciding.
Low sulphur fuels
- Preparation: Firstly, all the fuel tanks and piping containing the high sulphur fuel, need to be drained and cleaned to prevent contaminating the new bunkers and making the vessel non-compliant. This need for tank and equipment cleaning is costly, time consuming and cannot be done whilst the vessel is trading.
- Component wear: The burning of distillate fuel can lead to issues with engine components because of the low viscosity of the fuel, which may cause excessive wear and scuffing due to its inadequate lubrication properties.
- Older engines: The lower viscosity of distillate fuels may be problematic for some engines, especially older, worn, engines and may cause starting issues because of insufficient injection pressure being generated.
- Availability: The availability of marine gas oil (MGO) or distillates is a concern from the outset and it is very likely that the price differential between compliant fuels and high sulphur fuels used along with an scrubbers, could be quite high. This could give commercial advantage to ships with scrubbers.
- Compatibility: The supply of the new blends of compliant fuels will likely result in some compatibility and stability issues and will require extra vigilance when bunkering this type of fuel. To reduce the risk of incompatibility, vessel operators must prepare for increased segregation, according to standard bunkering procedures and must work closely with their bunker suppliers to make sure that compatible fuels are supplied.
Scrubbers
- Cost: Fully installed prices for an open-loop system for a VLCC range from USD 2.8 million to over USD 6 million, and delivery from seven months to over two years. These prices and delivery times are very dynamic and both have been seen to increase over the last two months.
- Fitting: The next issue is to find a shipyard suitable the ship’s trading area and schedule, and to open negotiations on availability, price and installation time. To be able to dock the vessel during the classification survey schedule, and install the scrubber, is commercially attractive for an owner. However, this is not always possible the Swedish Club mentions, because of the scrubber delivery time. Today’s installation time is estimated between 35-40 days. This is expected to reduce as yards become more experienced at retrofitting.
- Preparation: The owner has to carry out a 3D scan of the engine room and funnel areas in order to establish the space required and piping runs. After this, a comprehensive engineering package must be prepared and presented to the classification society for approval, and be sent to the shipyard for final pricing and scheduling. Alternative options for conducting the underwater work whilst the ships is alongside also need to be explored.
- Availability: Shipyard availability is an issue for many owners and could offer the biggest challenge in the retrofitting of scrubbers. The new Annex VI sulphur cap and the delayed BWTS requirements, along with the demand for docks for regular repairs and survey work, have led to an unprecedented demand for shipyards, increasing prices for yard space.
- Operation: After the system is installed, its performance must be certified in order to make sure that the exhaust discharge and water discharge complies with the required regulations. This will be completed and verified by the attendance of the vessel’s classification society surveyors while on sea trials.
- Technical problems: Apart from the non-compliance problems that will take place, several other issues could arise from the installation of scrubbers, such as: Failures of technology; Outfitting; Impact on operation; Chemicals and waste; System failures; and Quality.
