The maritime industry will see a "big growth in scrubbing" for the long term, in order to meet the increasing regulatory challenges, Marine and Energy Consulting's managing director Robin Meech said Thursday.
Speaking at the 35th International Bunker Conference in Copenhagen, he said the cost of resorting to scrubbers would be a big motivating factor for growth.
Subject to some economies of scale and the age of vessels, scrubbing is "the cheapest method to comply for existing ships less than 15 years old," he added, comparing scrubbers to low sulfur bunker fuel and LNG.
The approximate cost of a scrubber is around $4 million, varying on ship size, industry sources said previously.
Scrubber systems are air pollution control devices that can be used to remove some particulates and/or gases. On board a ship, scrubbers are installed on ships' engines to remove sulfur from bunker fuel.
If a ship spends a lot of time in ECA areas, it would make sense for it to use scrubbers or LNG, said Meech.
By 2025, the projected figure for heavy fuel oil being scrubbed annually is set at 28 million mt, and the industry would have a cumulative investment of $15 billion, he said.
By 2025, he projects around 6,000 scrubbers will be in operation.
In the current market, scrubber supplier Wartsila said that "as of March 2014, Wartsila has 45 vessels contracted for a total of 94 exhaust gas cleaning systems for both new building and retrofit projects."
By 2035, Meech projects that these numbers will "more than" double.
OTHER FACTORS
How shipowners choose to comply with upcoming regulations will not only depend on the vessel's age but also on the availability of compliant fuels, access to financing, flexibility to move ships to non-ECA trade areas, technological developments and their level of confidence in predicting fuel and technology prices, said Meech.
The developing situation of global LNG infrastructure will also be another key factor, as will the question of when the International Maritime Organization will introduce the global sulfur cap of 0.5%, he said.
The IMO is due to review the global sulfur cap of 0.5% in 2015 and will make recommendations by 2017, just three years ahead of the proposed implementation in 2020. This will be a drastic drop from the current 3.5%.
FUTURE OF LNG
In considering LNG as a bunker fuel in non-LNG tankers, there are several pros and cons to consider, and shipowners will have to weigh the advantages of lower emissions against disadvantages such as retrofit costs, which might end up being more expensive than scrubbers, Meech said.
The cost to outfit a newbuild with LNG fuel tanks and engines can be 20-40% more, he said.
And with LNG in unchartered territory as a bunker fuel, there is uncertainty about price, he added.
In projected figures, if LNG does take off, the market should see some 8 million mt/year of LNG used as bunkers, and this volume will be used mainly by around 1,700 smaller vessels, Meech said.
This volume will account for around "11% of bunkers consumed," he said.