A surge in scrubber orders proves that the predicted surplus of high-sulphur residual fuel oil when IMO’s global cap on sulphur in fuel which takes effect in 2020, will not be enough.
More Scrubber installations
Argus Media analysis of energy and shipping industry manufacturing sectors added to a growing body of evidence showing an uptake of scrubber orders in 2018, particularly in the tanker sector, but the said order numbers were too small to have a significant impact on HSFO consumption post-2020.
“Container ships are the biggest residual fuel oil bunker consumers, and the bigger container ship conglomerates have yet to commit to a scrubber installation strategy,” says the Argus Media report.
“To date in 2018, tankers have outpaced cruise ships when it comes to the number of vessel scrubber installations. The tanker count, which includes crude, product and chemical tankers, reached 190 and the cruise ship count was at 174,” Argus reported.
The report also pointed out a reluctance within the container shipping sector to agree contracts for scrubber installations. Combined with the short installation window ahead of the 1 January 2020 sulphur cap implementation date, the report concluded energy markets would not be able to avoid an HSFO surplus.
“Tankers, container ships and bulk carriers are the biggest consumers of heavy bunker fuel oil, but the number of those vessels with scrubbers accounts for less than 5% of their respective fleets.”
The Argus report cited 2015 figures from the US-based International Council on Clean Transportation which estimated that tankers, container ships and bulk carriers accounted for 78% of the global HSFO bunker demand.
Container ships made up 30%, bulk carriers 25%, oil tankers 16% and chemical tankers 7% of global demand, estimated at the time to be more than 210 mta, the report said. The demand for marine distillates in 2015 was roughly a quarter that of HSFO, at 49.52 mta.
Majority needs LFSO
With less than 5% of those primary HSFO-consuming market sectors committed to using HSFO with scrubbers after 2020, the likely compliance option for the remainder of the fleet would be low-sulphur distillate fuels, representing a major market shift.
Yet to confirm scrubbers
The numbers from Argus Media’s own scrubber database shows just 253 vessels across the global commercial fleet fitted with scrubbers. Another 151 vessels will add scrubbers in 2018 and 2019, 130 more between 2020 and 2023, and 309 vessels have contractual options for scrubber installations with no set dates yet agreed.
The report shows total installed and ordered scrubber systems across the shipping industry to be 842, which Argus noted as significantly lower than the 983 scrubber systems the Exhaust Gas Cleaning System Association (EGCSA) reported to be installed or on order as of May 2018.
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