Risks Extremely High for 2020 Non-compliance, Warns Experts from Wärtsilä

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More than 90% of the global vessel fleet rely on sulphur cap-compliant fuels after the implementation of global sulphur cap, while the remaining lines choose to invest in different technologies and operational investments such as scrubbers, says an article published in Wärtsilä website.

Environmental impact

As more industries acknowledge the role of climate change in economic growth and labour productivity, entire segments of the economy are taking steps to limit their environmental impact. 

Maritime industry

This year, the International Maritime Organization has laid new environmental regulations for the maritime industry. 

Under the new regulations, known as the sulphur cap, all ships sailing the world’s oceans have to immediately reduce the amount of sulphur released from ships into the atmosphere. 

Huge cost

To be compliant with the regulations could potentially lead to huge costs for cargo shipowners and operators. This inturn will influence a rise in freight fees, globally. 

Old ships, new rules

According to industry estimates provided by Shipping and Freight Resource:

  • more than 90 percent of the global vessel fleet will have to have to rely on sulphur cap-compliant fuels after 1 January 2020, while 
  • the remaining lines will choose to invest in different technologies and operational investments such as scrubbers.

Michael Borisov, Chief Investment Officer at Leon MFO Investments said the shipowners expect an increase in shipping fees globally due to the sulphur cap. The reason is that most cargo tankers and bulkers have a lifespan of 20-30 years.

Spur in demand

According to Borisov, many companies would write off old ships (due to the changes in regulation), leading to shortage of supply in the transportation market, causing spur demand and a raise freight fees.

Options for compliance

Annually, no more than 5 percent of the world’s cargo ships are being replaced. So, the new regulations mean that companies will have to make changes to their ships currently at sea.

These existing vessels should either switch to more expensive sulphur cap-compliant fuels or install scrubbers, which clean sulphur from ships’ exhaust.

Scrubber a technological revolution 

The IMO regulation effectively launched a technological revolution in scrubber systems. According to available data, more than 3,000 vessels had been equipped with scrubbers by the time the sulphur cap entered into force. 

Few owners who opted for scrubbers

  • Euronav reported purchasing its first ships with scrubbers; 
  • DHT, a US-listed owner of very large crude carriers, says it has saved USD 14.6m by using scrubbers on almost half its fleet; and 
  • Seanergy Maritime announced that it has completed the installation of scrubbers on five capesize vessels, or 50 percent of its owned fleet, with USD 14m investments overall.

Financial advantage

Borisov said as the costs of installing scrubbers are fixed, and the costs of compliant fuels are unpredictable and depend on oil prices, refinery pricing and even geopolitics. 

For ships that will be replaced in the near-to-medium term, both scrubbers and compliant fuels may look like temporary solutions for shipowners. 

Beyond compliance

A cost-effective means 

This increase in the use of scrubbers, or Exhaust Gas Cleaning Systems (EGCS), as a cost-effective means to achieve compliance has led to a revival of the discussion around their reliability, however.

The biggest concern

Experts from Wärtsilä, one of the world’s leading suppliers of marine scrubber systems, say the biggest concern with EGCS is corrosion of the system or the piping, which can result from: 

  • poor design, 
  • construction, or 
  • installation. 

Scrubbers from Wärtsilä 

Wärtsilä has provided scrubbers for a variety of vessel types, from oil tankers to cruise ships to fishing vessels, and has made reliability a focus of its scrubber offerings. 

Material used in Wärtsilä scrubbers is subjected to extensive testing and research by third-party experts and in independent analyses.

According to Sigurd Jenssen, Director of Exhaust Gas Cleaning at Wärtsilä:

“It is no accident that scrubber reliability is emerging or rather, re-emerging, as an issue now.” 

Importance of scrubber choice

An unreliable scrubber system significantly compromises compliance with the sulphur cap. 

“Safe return to port is always key, so you are not going to be penalised for sailing to the port you were going to if your scrubber stops working,” says Jenssen. “But whether you have to get it fixed straight away or can continue sailing until the spares are available and repairs arranged is up to the port state.”

Company reputation

Suppliers lacking experience in the marine market may not be able to recognise the full consequences of their choices or the scale of corrosion that can occur. 

Beyond risking fines and detentions, a vessel that is non-compliant due to a faulty scrubber might also tarnish the reputation of its parent company and other vessels in the fleet. 

Inspection at port

According to the Marine and Port Authority of Singapore, previous non-compliance will be part of the risk profiling that will be used to determine which vessels are subject to inspection when they arrive at port.

Wärtsilä’s service network

“The risk and costs associated with non-compliance are extremely high. When we look at the competitive landscape for scrubbers, we see several companies that have no service network at all, many who are newcomers to the marine world and actually none that have a network comparable to ours,” says Jan Othman, Director of Exhaust Treatment at Wärtsilä.

Testing of materials

The company has tested its materials itself and conducted extensive research with third-party experts, as well as confirming its selections against independent analysis. 

  • Wärtsilä is also incorporating the latest technological developments into its EGCS. 
  • The system’s automation and control system is being developed to enable even better cybersecurity and easier integration for big data functions. 

Cost effective

  • A new standard control system will be able to connect to Wärtsilä’s Data Collection Unit, an integrated data bridge that collates sensor readings from multiple sources on the ship. 
  • This data is then fed back to Wärtsilä to help both optimise and improve a vessel’s automation and control systems on both current and future journeys.

These developments provide yet another way to assist shipowners in reducing both fuel costs and emissions, making progress on the journey to a Smart Marine Ecosystem. 

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Source: Wärtsilä