Wärtsilä and CME Offer Scrubber Financing Solution

Finnish engineering company Wärtsilä and Clean Marine Energy (Europe), a developer of Emission Compliance Service Agreements, have signed a collaboration agreement that will provide funding intended to ease the financial burden on ship owners seeking to install scrubber systems in order to meet sulphur emissions legislation.

The financing solution enables a ship owner to repay the cost of the scrubber system installation via a fuel adder, i.e. a fuel premium on the price of heavy fuel oil (HFO) by which the ship owner repays the cost of installing the scrubber.

This provides a return from the differential between HFO and marine gas oil (MGO) for a period of four to six years, depending on price spreads, meaning that ship owners can avoid the up-front capital expenditure, which is typically between USD 3 million and USD 12 million per vessel.

“The shipping industry is faced with a number of environmental regulations right now, often with a significant capital burden,” Pace Ralli, Co-founder and Director of CME (Europe) said.  

”Despite lower fuel costs, there is an even greater spread between HFO and MGO; as much as 90% in some cases. This allows us to inject capital to pay for the installation of a scrubber, allow the ship owner some of the benefits of continuing to burn HFO and still take out a return. In addition, the asset value improves, while the ship owner is compliant with new tighter ECA regulations. “