Number Of Scrubber-Equipped Vessels To Grow

Credit: Ian Simmonds/Unsplash

Despite a significant drop in the number of installations, the share of scrubber-fitted vessels is expected to increase in the coming years, says an article published on Splash.

Scrubbers installed

BIMCO reported 399 onboard installations last year, a 24% decrease year on year, with scrubbers now installed on 13% of bulkers, tankers, and containerships.

This percentage is set to rise, as 17% of ships currently on the yard’s books are expected to have scrubbers installed.

Current regulations

Installing scrubbers allows shipowners to comply with current regulations while benefitting from the price differential between high sulphur fuel oil and very low sulphur fuel oil (VLSFO).

But BIMCO’s chief shipping analyst, Niels Rasmussen, noted that the price premium for VLSFO has turned out to be less than initially estimated.

Discouraged owners

“The lower-than-expected VLSFO premium has likely discouraged owners from installing scrubbers, particularly on smaller ships with lower bunker consumption and lower savings as a result,” Rasmussen said.

Premium for VLSFO

Since January 2020, the premium for VLSFO has averaged $149 per tonne, being as low as $50 per tonne for an extended period during 2020 and as high as $400 per tonne last June and July.

Payback period

“The higher the VLSFO premium, the more attractive the investment in a scrubber is because the payback period is shorter,” Rasmussen said.

In the long term, however, Rasmussen estimated the use of scrubbers to cut sulphur emissions may reduce “as decarbonisation efforts will increase the use of alternative fuels that are sulphur compliant”.

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Source: Splash


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