October 2, 2020
— IMO MEPC meeting in November likely to provide more clarity
— Ports increasingly prohibiting washwater discharge from open loop scrubbers
— Narrow LSFO-HSFO spread makes economic case for scrubbers less favorable
The International Chamber of Shipping in its Annual Review for 2020 said that it was working to ensure that any controls by port states on the use of scrubbers by ships is harmonized within an evidence-based International Maritime Organization framework.
In 2019, in response to a submission by EU Member States, the IMO Marine Environment Protection Committee, or IMO MEPC, agreed a new work output for the evaluation and development of harmonized rules and guidance on the discharge of liquid effluents from exhaust gas cleaning systems, or scrubbers.
“ICS supports the concept of a harmonized approach, but only provided that any subsequent control measures will be based on sound technical evidence,” it said in the review made available on Oct. 1.
“Most importantly, given the huge investments that many shipping companies are now making in scrubbers,the overarching IMO principle of ‘grandfathering’ arrangements for existing ships must be maintained,” ICS said.
This is to ensure that early adopters of new technologies which are permitted under MARPOL are not unfairly penalized in the event that IMO’s current position regarding their use is changed in the future, it said, adding that discussions on this issue are expected to resume at the MEPC meeting in November 2020.
Concerns over open loop scrubbers
Despite the adoption of these IMO Guidelines, worries about the possible environmental impact of scrubbers have led to an increasing incidence of unilateral action by several IMO Member States to ban wash water discharges from scrubbers operating in the open loop mode within their territorial waters, the ICS said.
Restrictions or bans on using open loop scrubbers have been reported in certain ports that have banned wash water discharge from such scrubbers within their port limits or territorial waters. This includes China, Singapore, Malaysia, Pakistan, Fujairah and Abu Dhabi in the UAE, Bahrain, Saudi Arabia, and Oman.
Extended paybacks
But in future the accelerated uptake of scrubbers remains a question mark due to other reasons too, some industry sources told S&P Global Platts on Oct. 2.
A major consideration is the price differential between high sulfur and low sulfur fuel oil. With the sharp fall in crude oil prices during the first half of 2020, reflecting the impact of the global coronavirus pandemic, and the significant narrowing of this price differential, the payback period has got extended drastically.
In January, the price differential between HSFO and LSFO averaged $298.90/mt as the market was transitioning to LSFO to comply with the IMO 2020 global low sulfur mandate. The price differential has since narrowed to an average of $60.32/mt in September, Platts data showed.
“We had sent a few of our vessels for scrubber installations at end-November ahead of the IMO 2020 transition. The scrubber installations saw some delays due to the coronavirus pandemic and they were completed around July this year,” a shipowner said.
“So far, we have no plans to fit more vessels with scrubbers,” he added.
Another shipowner said that scrubber installations, which they had originally planned earlier, would be completed in the coming months. “We don’t have any further plans at the moment to install more scrubbers because of the coronavirus pandemic,” he said,adding that the commercial advantage of installing a scrubber had also become unclear in this challenging environment.
Surabhi Sahu
surabhi.sahu@spglobal.com
Amy Tan
amy.tan@spglobal.com
Edited by Jonathan Dart,
newsdesk@spglobal.com
