How to Comply with High-Sulphur Fuel Ban?
- Rules & Regulation
Owners, operators, masters or chief engineers found guilty of transporting non-compliant fuels intended for burning in marine engines could face stringent financial penalties and possible imprisonment if IMO adopts the high-sulphur fuel ban.
The message was conveyed by Laura Langh-Lagerlof, Managing Director of Langh Tech, Finland-based designer and producer of exhaust gas cleaning systems, at a special panel session during the Sulphur Cap 2020 conference in Amsterdam today.
Amongst the measures to reduce shipping’s carbon footprint adopted at the 72nd session of the IMO’s Marine Environment Protection Committee, which met last week in London, the MEPC approved proposals to ban the carriage of high sulphur fuels, submitting draft amendments to MARPOL Annex VI for approval and adoption at MEPC 73.
Should the amendment be adopted, any ship without an approved scrubber or equivalent arrangement would be banned from carrying and using bunker with a sulphur content exceeding 0.50 pct.
“The MEPC 72 decision makes clear that technical solutions are now required if shipowners are to comply with the sulphur limit requirements,” she said.
Langh-Lagerlof added that of all the possible fuelling options, the use of heavy fuel oil with a scrubber remains the “sensible option”.
“Given the continued concern surrounding methane slip, LNG fuel could potentially be more environmentally hazardous than the current arrangement, while the direct and indirect costs associated with burning low sulphur fuels would have a considerable impact on the shipowners P+L.
“The low viscosity, low lubricity, acidity, flashpoint and cylinder oil compatibility of these expensive fuels could also result in corrosion issues and other engine problems. With a scrubber, at least there’s a return on the investment,” she said.
Langh-Lagerlof explained that Langh Tech’s closed loop scrubber removes oxides of sulphur from the HFO exhaust emissions without resulting in a corrosive wash water typical of other exhaust gas cleaning systems.
The case against scrubbers
Even though companies such as Trafigura plan to install scrubbers across their ships, liner majors such as Maersk Line, Hapag-Lloyd and Pacific Basin have openly expressed their disapproval of scrubber technology.
BunkerEx, a London-based online marketplace providing shipping companies access to a network of bunker supppliers and traders, believes that scrubbers are not the answer for the time being.
BunkerEx explained that there is a strong economic incentive for refiners and blenders to produce a stable <0.5 pct sulphur fuel oil, thus increasing its availability as opposed to HSFO.
“Suppliers that are able to offer compliant fuel at a discount to MGO can gain considerably.
“Therefore, shipowners shouldn’t completely resign themselves to paying MGO prices, but instead recognize the strong market incentives for the supply of <0.5% sulphur fuel,” BunkerEx said.
The company concluded that installing a scrubber before the landscape of available fuels is clear seems unnecessarily high risk, as the pay-off is uncertain.
“In a recent survey, only 13% of shipowners said that they intend to retrofit a scrubber. Therefore retrofitting one onto your vessel goes against 87% of the market,” the company said.
“As the technology becomes more commonplace, the cost of fitting scrubbers and disposing of the waste should decrease. It is always possible to fit a scrubber later once the picture becomes clearer.”
However, in the case where a shipper can secure HSFO supply in all their ports, installing a scrubber could be a clear winner, BunkerEx said. This would only work with long-term supply contracts and a reliable supply chain.