Danish liner giant Maersk Line has confirmed its investment in scrubbers in its latest announcement on fuel adjustment surcharge ahead of the 2020 sulphur cap.
The report on the investment was published by Reuters last week, crushing the company’s previous statements that did not favor the technology.
Namely, to become compliant with the 0.5 percent sulphur content rule as of January 2020, shipowners will have to invest in compliant fuels, LNG or scrubber technology.
Maersk Line’s representatives said earlier that the company was not “on the scrubber team” due to operational concerns, as the technology has not yet proven itself on large two-stroke diesel engines used across Maersk’s fleet.
This in particular relates to open-loop scrubbers, which have been deemed by many industry players as a short-term solution due to the wash water-related issues and the looming ban on its release in certain geographical zones. Closed loop scrubbers, on the other hand, pose another type of challenge related to space constraints on board needed for the installation of the systems.
It its latest announcement, Maersk said it will invest in “a limited number of scrubbers”, but information on the type of scrubber systems or ships to be fitted with the systems was rather sketchy.
Scrubbers are gaining in popularity as numerous owners from various shipping sectors reveal investments in the technology, including most recently Hapag-Lloyd, DHT Holdings, Maran Tankers, Safe Bulkers, and Star Bulk.
The cost of installing a scrubber system on a vessel currently stands at around USD 2 million, and many owners are looking to entice the charterers to pay for the installation costs. Ships eligible for installation are those larger in size, such as Capesizes, VLCCs or ULCVs, due space availability, economy and cost efficiency.
When approached by World Maritime News for a comment, Maersk Line provided us with a statement from Niels Henrik Lindegaard, Head of Maersk Oil Trading, saying that scrubbers would be “a small part of – and just one of several elements in – our overall 2020 fuel sourcing strategy to ensure compliance in time.”
As part of the plans, Maersk is also looking into LNG and compliant fuels, the latter being the more prominent option for the company’s fleet come January 2020.
“As part of the preparations we have decided to invest in new scrubber technology on a limited number of vessels in our fleet of around 750 container vessels. While we will continue to explore how to best comply with the 2020 sulphur cap, we still believe the best solution remains with compliant fuels from refineries on land. It is important to underline that the vast majority of ships in the global fleet, as well as the Maersk Line fleet, will have to comply with the global sulphur cap through the use of compliant low-sulphur fuels in 2020 given the short time frame,” Lindergaard’s statement reads.
The new compliant fuels are expected to push the container shipping industry’s fuel bill by USD 15 million, with Maersk Line alone having to pay USD 2 billion more for fuel on annual basis. Hence, diversification and pursuing of cost-efficient investments, including scrubbers, is a sound strategy given the fast-approaching deadline for the enforcement of the new rules.