An agreement has been signed between Korea Development Bank (KDB), local steelmaker POSCO, and three South Korean shipping companies to install scrubbers on bulk carriers that transport coal and iron ore to POSCO.
According to a statement from POSCO, the scrubbers will reduce by 90% the volume of sulphur oxides released from coal and iron ore.
KDB will lend an undisclosed sum of money to Korea Line Corporation (KLC), Pan Ocean, and H-Line Shipping to install the scrubbers by the end of 2019. The installations will take place on 20 bulk carriers owned by the three companies. The ships are all committed to long-term transportation contracts with POSCO, which aims to comply with the International Maritime Organization’s forthcoming restrictions on emissions in 2020.
Policy lender KDB, owned by the South Korean government, is the largest source of ship finance in South Korea.
There has been much debate over the cost-effectiveness of scrubbers. Bjorn Hojgaard, chief executive of the Anglo-Eastern Group, said in a recent interview with Fairplay that fitting scrubbers to the global merchant fleet of 60,000 ships would cost the industry about USD200 billion.
He added that, while an average scrubber costs about USD1.5 million, installation and associated costs would double that figure to about USD3 million per ship.
He said an onboard scrubber adds 120–150 tonnes to the funnel, increasing ship deadweight and creating stability issues. He added that it would also increase electricity consumption, boosting power needs that could demand a secondary generator and raising fuel costs.
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Source: Yonhapnews Agency
