The International Maritime Organization’s (IMO) 2020 sulfur emissions cap is causing a big shakeup in the ocean carrier industry. With the implementation of the cap right around the corner, it’s critical to understand how the shipping world will be impacted by these changes.
To comply with this cap, vessel owners may switch to one of the following three primary compliance options: (1) very low-sulfur fuel oil (VLSFO); (2) using alternative clean fuels like liquefied natural gas (LNG); or (3) installing ship scrubbers which allow them to use high-sulfur fuel oil (HSFO) without exceeding the IMO 2020 sulfur cap.
What is a Ship Scrubber?
Vessel scrubbers, also called Exhaust Gas Cleaning Systems (EGCS) allow vessels to burn HSFO fuels without emitting sulfur exhaust that is in excess of the IMO 2020 sulfur cap. EGCS functions by introducing alkaline water into the vessel’s exhaust which removes sulfur along with other unwanted chemicals. This process allows for the use of HSFO while still remaining compliant to IMO 2020. EGCS installation has an initial startup cost of US$3M to US$10M, but the potential lifetime savings in fuel costs are vast for ship’s equipped with ship scrubbers.
What are the Benefits of Ship Scrubbers?
The primary benefit provided by the installation of a ship scrubber for ship owners is the ability to use HSFO fuel which is currently much cheaper than VLSFO options due to the upcoming IMO 2020 changes. IMO 2020 has caused a large shift in fuel prices and availability which allows for vessels that use EGCS the option of using much cheaper fuel. VLSFO prices have recently spiked while HSFO is being sold at a roughly 50 percent discount to compliant fuels. This has the potential to provide a massive financial advantage for vessel owners that make use of EGCS technology.
For more information or help with any of your shipping needs, contact ClearFreight and get in touch with our logistics and brokerage experts today.