The 7 Ongoing Myths regarding scrubbers
1. Scrubbers are too expensive.
Totally untrue. A 10 MW scrubber can be manufactured and installed in about USD 2 million. Additionally, unlike Ballast Water Systems, a Scrubber investment will immediately start paying off in fuel savings from Day 1.
2. The ROI is very long.
Totally untrue. The ROI is about 14 to 16 months for a 10 MW Scrubber. If the main engine MW is 30 or 40 MW, the ROI drops to 6 to 7 months only.
3. It takes 9 to 12 months to manufacture a scrubber.
Totally untrue. Viswa can do it in 4 months.
4. The installation time is 9 to 10 months and the engine immobilization time is 2 months.
Wrong again. The installation time is 4 to 6 weeks and the immobilization time is 4 to 5 days.
5. The Oil companies will guarantee availability of low sulfur fuel after 1.1.2020.
The question is not about availability but the availability at what price. Oil companies would love to maximize their profits using this opportunity.
6. The differential price between high sulfur and low sulfur fuel will not stay at the current $250 per MT level but will drop to $60 to $70 per MT.
Totally untrue. We know from the recent history of hybrid ECA fuels that the differential price which started at $50/MT less than MGO price is now only $15/MT less than MGO price. This is true despite more than over 16 organizations competing to provide this fuel to the marine market. This means that even for this fuel that the price differential when compared with heavy fuel is $235 per MT.
Considering the processes and the blending to be carried out, the low sulfur fuels including 0.5% fuel will cost a minimum of $200/MT or more than the high sulfur fuel. It is impossible to bridge this. The Ultra low sulfur diesel fuel for the automobile market sells at $3 per gallon or about $1100 per MT. When this is the case, how can low sulfur fuel (0.5% sulfur) be sold at a price at a lot less than the current price which is $550 per MT?
7. There is no vested interest for the refineries with regard to the supply and pricing of the low sulfur fuel.
Sorry, not acceptable. In fact, the oil companies promising availability of low sulfur fuel (without giving pricing) is misleading ship owners/operators. It looks like a very clever ploy to
Stop the ship owners/operators from going for scrubbers. When the Regulations kick in, from 1.1.2020, ship owners/operators will be forced to go for blended low sulfur fuels offered by the Oil Companies so that these companies will make the huge profit generated by the differential cost between High Sulfur and Low Sulfur fuels.
If ship owners/operators fit scrubbers, they will harvest the huge monetary benefit for years, after paying for the scrubber in the first 1+ year. If they don’t, the oil companies will make huge profits for years. PLEASE CLEARLY UNDERSTAND THAT THE VESTED INTEREST IS WITH THE OIL COMPANIES.
By Dr. R.Vis,
Viswa Group
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