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The evaluation on investment – Conclusive review on Scrubber installation

‘Scrubber installation’ has been making the headlines for quite a while since last year. Most of them in favor of it as the speculation last year was the cost of compliant fuel would be double that of IFO380(HSFO).

However, the global oil price crash has prompted a steep slide in the price differential between compliant fuel and high-sulphur fuel (HSFO) to as low as $40 a tonne, from over $300 at the start of the fourth quarter of 2019. As a result, companies who already invested in scrubbers are having to compromise on their profitability. They now have to wait longer to reap the returns on their investments.

Secondly, most of the vessels built during the beginning of this decade, are equipped with super long stroke ME engines (Electronically controlled engines). which with higher compression ratio and better thermal efficiency has low Specific fuel oil consumption(SFOC). In such cases, the reduced daily consumption and existing fuel price differential would increase the downtime to reach break-even.

https://maritimereviews.com/marine-updates-2/

Further, most countries, including many emerging economies, have banned the usage of the open-loop scrubber on their territorial waters. Since 90% of the vessels with scrubber are open-loop, it has affected the downtime to achieve break-even for the average $2million investment already made for scrubber installation.

Moreover, by now, many of us are aware of the significant maintenance cost, especially unscheduled one associated with the scrubber system. Vessels invariably face issues particularly related to automation and due to lack of redundancy, which forces them to switch over to compliant fuel until the related technical issue is resolved, further adding to the shipowner’s operating cost.

Taking into account the current bunker cost and vessels daily consumption applicable to various size of vessels, I feel, consideration of scrubber installation would be economically viable for vessels of size Aframax/New Panamax and above.