The implementation of the IMO 2020 0.5% global sulphur cap represents a challenge and risk for the shipping industry, with fuel costs expected to increase by about 50% combined with a lack of clarity around availability and quality of fuels.
Wallenius Wilhelmsen is relatively well covered through Sulphur (BAF) clauses already in place for majority of the larger customer contracts and aims to introduce relevant clauses for remaining customer contracts.
How to handle uncertainty?
To handle this uncertainty, Wallenius Wilhelmsen has chosen a balanced approach which gives the best chance of managing risks and costs. The group has therefore arrived at a strategy of combining operation with different types of low sulphur fuel and installing scrubbers on the most suitable vessels.
Retrofit scrubber program
In June 2018 Wallenius Wilhelmsen decided to initiate a program to retrofit scrubbers on 20 vessels in the next few years, increasing the number of vessels in the fleet with scrubbers to 25. The average cost per scrubber instalment is estimated to be USD 6-7 million. The scrubbers will be retrofitted during scheduled dry docking to minimize impact on the operations and will be financed through available cash and/or credit facilities.
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Source: Wallenius Wilhelmsen
