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SCRUBBERS vs LOW-SULPHUR FUEL QUESTIONS 1. IS THE
IMO 2020 SULPHUR REGULATION IMPORTANT TO THE ENVIRONMENT? 2. WHAT WOULD YOU RECOMMEND TO A SHIP OWNER AS THE BEST SOLUTION TO MEET THE IMO 2020 SULPHUR REGULATION? 3. ARE SCRUBBERS AN OPTIMAL SOLUTION TO MEET REGULATIONS? COMMENTARY SWEDISH AGENCY FOR MARINE AND WATER MANAGEMENT FREDRIK LINDGREN, ANALYST “At the Swedish Agency for Marine and Water Management, we consider using low-sulphur fuel to be the best solution when it comes to lower emissions. About scrubbers, we feel closed scrubbers ought to be used, since more and more research suggests that using open-loop scrubbers entails environmental issues. We don’t want to speculate if scrubbers are going to be more or less frequently used in years to come, but we believe that stricter protocols and regulations will be enforced on open-loop scrubbers. Because by using them, all you do is move the environmental issue from the air into the sea.” INTERNATIONAL CHAMBER OF SHIPPING SIMON BENNETT, DEPUTY SECRETARY GENERAL 1. “Yes, the reduction of sulphur emissions will bring health benefits to populations in coastal areas where the majority of the world’s people live, and the epidemiology indicates this will significantly reduce the incidence of respiratory illness that can shorten people’s lives. Sulphur emissions are also a major cause of ocean acidification.“ 2. ”Operators that opt to use 0.5% fuels will need to make careful judgements as to the extent to which fuels will be available for every voyage they are likely to undertake. Companies should bear in mind that in the event that the only compliant fuel available in a port is 0.1% distillate, their ships will be required to use this in order to be compliant with MARPOL, regardless of any additional cost and inconvenience that might result from having to use or carry more than one type of compliant fuel.” 3. ”The option to use scrubbers is something which ICS fought hard for when the MARPOL amendments were adopted in 2006, but whether they are optimal will have to be assessed by indvidual companies according to the trade in which they operate and the design and age of the ship.” IMO EDMUND HUGHES, HEAD OF AIR POLLUTION AND ENERGY EFFICIENCY 1. ”The sulphur regulation is hugely important for the environment. A study on the human health impacts of SOx emissions from ships, submitted to IMO’s Marine Environment Protection Committee (MEPC) in 2016 by Finland, estimated that by not reducing the SOx limit for ships from 2020, the air pollution from ships would contribute to more than 570,000 additional premature deaths worldwide between 2020 and 2025.” 2. ”I cannot give recommendations on commercial decisions, which are going to be specific to the ship and its owner or operator. The forecast in the IMO-commissioned fuel oil availability study is that the majority of ships will go for using low-sulphur compliant fuel oil blends. Some may switch to LNG or other fuels and some may install exhaust gas cleaning systems, but the uptake of scrubbers is forecast to be a small percentage of the overall fleet.” 3. ”Scrubbers are one way to meet the requirements. It’s worth remembering that the flag state has to approve and accept the fitting of a scrubber as an equivalent means to comply with the regulation. Therefore, the shipowner does need to check with the flag state. Ships installing scrubbers to meet the new limit will need to plan for installation in advance of 1 January 2020. Shipowners may need to take into consideration limitations on the supply of the systems and the installation work that is required.” How do we meet the IMO 2020 sulphur regulation? One solution, open-loop scrubbers, has already been restricted by Belgium and Germany, and more countries may follow suit. We asked a number of stakeholders for their view on how to handle sulphur emissions. Can scrubbers do the trick? Or is low-sulphur fuel the better choice? PRECIOUS SHIPPING PC KHALID HASHIM, MANAGING DIRECTOR NORWEGIAN SCHOOL OF ECONOMICS (NHH) ROAR OS ÅDLAND, (PH.D., MICS), SHIPPING PROFESSOR 1. ”IMO 2020 is very important for the environment. It will reduce the total amount of SOx released into the atmosphere by ships. This will reduce acid rain and other detrimental impacts on the most vulnerable portion of our population – children and infants.” 2. ”In my humble opinion, the simplest and most equitable method of meeting this regulatory requirement is to burn LSFO.” 3. ”Scrubbers are old technology, which would simply transfer sulphur pollution from the air to the sea. They also have a host of other operational problems and costs. The biggest assumption is the spread between HSFO and LSFO prices in the future. No one knows what that will be, but spreadsheets have been made with various theoretical assumptions on this critical issue, which makes scrubbers seem like the best thing since apple pie.” 1. ”Yes, though it is important to keep in mind that shipping and the ‘maritime environment’ does not exist in isolation. For instance, if the sulphur that is removed, either using onboard scrubbers or desulphurization processing at the refinery, is not treated properly, then all we are doing is moving the problem from one area to another.” 2. ”Provided that there will be sufficient availability of low-sulphur fuels post-2020, switching to such fuels is the easiest solution. Freight rates will increase to reflect the higher fuel costs, which means shipowners will be no worse off than they are now in terms of vessel earnings.” THE SIMPLEST AND MOST EQUITABLE METHOD OF MEETING THIS REGULATORY REQUIREMENT IS TO BURN LSFO 3. ”On paper, scrubbers look like the better investment. However, investing in scrubbers comes with greater risks than just switching fuels. They are subject to political risk (e.g., a possible ban of openloop systems by China), technical risks (breakdowns, the cost and ability to get rid of sludge), and most importantly the risk that future price differentials for high/low sulphur fuels will be lower than expected such that they are not economical. There is also a substantial risk that high-sulphur HFO will not continue to be available as widely as today when a large part of the market switches to low-sulphur fuels.” OUR WAY SHIPPING 15