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Container Shipping & Trade

Container Shipping & Trade

Box ship scrubber market booms on back of 2020

Thu 18 Oct 2018 by Rebecca Moore

Box ship scrubber market booms on back of 2020
A contributory factor for box ships to adopt scrubbers is the uncertainty of 0.5% fuel after 2020, in terms of quality and price (Credit: CROE)

A strong business case means box ships are one of the top ship sectors installing scrubbers

The container industry has done an ‘about-turn’ – after showing little interest in scrubbers, this market is now booming due to the approaching 2020 low sulphur directive.

A symbol of this is Maersk's announcement it is adding exhaust gas cleaning systems, or scrubbers, to some of its ships to comply with IMO sulphur limits coming into effect in 2020.

The scrubber order comes just under a year after the container shipping giant repeatedly said it was ruling out scrubbers as a 2020 compliance option and sees Maersk join a growing number of companies who have purchased scrubbers in a trend that has accelerated during 2018. 

Maersk's head of oil trading Niels Henrik Lindegaard said although the company is diversifying its compliance options, it is still betting heavily on low-sulphur fuel.

“Maersk is looking into all possible and available opportunities to ensure we are ready to comply with the 2020 sulphur cap,” Mr Lindegaard said. “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,” he said.

Mr Lindegaard said the decision to install scrubbers represents only a small piece of Maersk's 2020 fuel sourcing strategy. 

Box ships top scrubber market

DNV GL gathers monthly global statistics for ships confirming the number operating with scrubbers and those which have scrubbers on order and as of October, there were 33 confirmed projects for ropax ships and 155 for cruise ships. Container ships and bulk ships beat these orders with 243 and 552 orders respectively.  

Of course, the cruise sector was an early adopter of scrubbers, and its requirements are now almost full. Wärtsilä general manager exhaust treatment Stian Aakre told Container Ship Technology “The cruise sector has kept us alive over the last three or four years, because when everyone was waiting for the IMO decision [2020] the cruise industry was installing scrubbers. The cruise market has been a very important market for us for a while; we still sign cruise contracts for both newbuild and retrofits.” But he pointed out there had been a “distinct change” in the market since 2016, when IMO decided to introduce the low sulphur directive in 2020, which is when the merchant marine market took scrubbers into consideration. “Bulk carriers, tankers and container ship sectors are where we now sell the most.”

Wärtsilä's figures show that as of 2018 it has 415 signed scrubber contracts for vessels across all sectors. Of these, it has signed contracts for 128 bulk ships and 114 container ships.

Talking about one of the main drivers of all segments to adopt scrubbers, Mr Aakre said “The potential of savings is what drives people to order scrubbers in all segments, and a contributory factor is the uncertainty of 0.5% fuel after 2020, in terms of quality and price.

“I know that a lot of operators in all segments are worried about the varying quality, so they might be happy with one quality in Europe, for example, and then not have a good bunker somewhere else, so there is inconsistency in bunker quality. Whereas if they install scrubbers, they can bunker well known fuel and at the same time open up to savings’ potential.”

CR Ocean Engineering (CROE) president and chief operating officer Nicholas Confuorto told Container Shipping & Trade “The bigger possibilities are in container ships – until now they were saying they would not go to scrubbers. Now they are all looking at scrubbers and I think they have to do that because it makes so much economic sense.”

MSC was an early adopter of scrubbers on container ships and Mr Confuorto opined this “forced the hand of other container operators to also consider scrubbers in order to remain competitive. It is an issue of competitiveness rather than technology”.

He warned “Today’s large price difference [between HFO and low sulphur fuel] will not even be close to what I believe it will be in 2020.”

Yara Marine Technologies also sees opportunity in the box ship scrubber market. Its chief sales and marketing officer Kai Latun said “The container ship market has really picked up.”

Scrubber versus compliant fuel

He reiterated the importance of the expected high prices of low sulphur fuels as driving the scrubber market. “If the price differential between the fuels is as large as every expert is saying, then practically any sized segment in the container sector will benefit from installing scrubbers and continuing to use HFO.”

He said predictions were that low sulphur fuel would cost up to US$400/500 a tonne. “The larger the vessel, the larger the fuel consumption, the really big vessels will use several hundred tonnes a day.”

Mr Latun added that any container ship vessels with engines ranging from just below 10 MW and upwards would “easily have a business case”, with payback times of 18 months or less.

Yara is delivering scrubbers to MSC’s 23,000-TEU ships currently being built in South Korea. “We are delivering scrubbers up to and exceeding 70-MW engines, they are very interesting projects and we are enjoying substantial success for newbuilds and retrofits.”

He warned about a queue building up as liners rush to get scrubbers installed in time. “It’s the ketchup effect – everyone wants to go in the same door at the same time. Like most of the experienced scrubber suppliers we now struggle with delivery times in 2019 for any new orders.”

While Mr Confuorto warned “Prices are going up as we get to 2020, while the opportunity to install scrubbers is shrinking. The major vendors are completely full and some vendors cannot take any more orders for 2019. Very few production slots are still available for 2019.”

He forecast there would be thousands of ships that could not install scrubbers in time for the 2020 deadline. “Therefore, there will be a market for scrubbers for several years after 2020, until the retrofit market completes and then it will become a newbuild market exclusively.”

CROE is fitting scrubbers to a range of container ships as well as bulk carriers, car carriers and tankers. 


Nicholas Confuorto (CROE)

Nicholas Confuorto is the president and chief operations officer for CR Ocean Engineering. He is also a founding member and the chairman of the Exhaust Gas Cleaning Systems Association. Since receiving his engineering degree from Columbia University in 1976, Mr Confuorto has focused his career in the field of environmental controls and has held high-level positions at some of the most respected corporate names in the global air pollution controls industry.


 

Modular scrubber concept aimed at box ships

A project to install a scrubber on a container ship has led to a new way of making and fitting these units on any ship type. But the technique has particular benefits for box ships, according to the engineers behind its development, Wärtsilä Services.

Esa Häkkinen, audit services manager, and Peter Karanen, senior project manager, at the company told CST about their scheme, in which scrubbers will be installed in modules, with the work spread across two or three port calls so as not to delay the vessel.

Each module is sized to match container dimensions so they can be mounted in the cargo area of a container ship alongside the uptake. But the modules weigh less than a container, Mr Häkkinen said, so the deck does not need strengthening and there is no change in the vessel’s stability or wind profile.

This arrangement will reduce cargo capacity slightly, he acknowledged, but said it would be no more than 1% and “it is quite seldom that vessels have sold more than 99% of their capacity.”

On other ship types, such as tankers and bulk carriers, cargo loss would not be significant but their decks would need reinforcing. So there are pros and cons for different ship types, he said, but the benefits for all of them are the installation flexibility and reduced off-hire.

He described how the concept had been developed, saying it had evolved from a proposal for a large container vessel. On such ships, there is normally an area where there is no cargo hold below the upper deck because of the engineroom’s location, so the initial plan was to build a compartment on deck for the scrubber equipment. From there it was a short mental step to conceive of modules that could be prefabricated and lifted on board.

At first, the idea was based around large scrubbers, for engines of up to 6 MW, but by scaling these down for smaller vessels it has been possible to market them as a new product line. Their development has been rapid and simple, Mr Karanen said, since an initial design team meeting in November 2017.

They are based on Wärtsilä’s own scrubbers and orders are already being signed. The first installation – which will not be on a container ship – is expected in February or March 2019, Mr Karanen said.

Installation work would typically be done in two ports, with a third port call used to carry out the underwater work to complete the job. That aspect of the installation might include creating an additional sea chest because of the volume of water needed for the scrubber, which could be done by specialist underwater contractors such as Trident, which Wärtsilä acquired in January 2018.

Trident offers a wide range of underwater repair and maintenance work of the type that will be vital for these modular installations, Mr Karanen said, but its purchase was not related to the company’s plans to offer modular scrubber installations, he added.

Once orders grow in number, the regular routes followed by container ships will be a benefit to their installation, Mr Häkkinen said. Some locations might be identified as being specialised in particular tasks – such as the underwater work, or installing the dampers or the modules – which would make it possible to establish an assembly line approach to installations on successive ships.

Asian ports are the most likely locations where the work will be done, because of container trade routes, but “we can do it wherever we have a crane and divers, pipe fitters and electricians,” Mr Karanen said.


 

ACL to use Alfa Laval PureSOx scrubber connectivity across fleet

Grimaldi Group has signed an agreement for PureSOx connectivity services on five vessels operated by Atlantic Container Line (ACL). A statement said the services will provide not only compliance monitoring but also valuable data to optimise PureSOx operations.

Grimaldi Group has been using PureSOx for exhaust gas cleaning aboard its vessels since 2014. ACL, a Grimaldi Group company specialised in transatlantic cargo shipping, has hybrid PureSOx scrubber systems installed on all five of its Generation 4 (G4) vessels: Atlantic Sail, Atlantic Sea, Atlantic Sky, Atlantic Star and Atlantic Sun.

The PureSOx systems on these vessels will now be retrofitted with the Alfa Laval Remote Emission Monitor (ALREM), a data reporting and storage device that forms the basis for the growing PureSOx connectivity programme. Grimaldi Group has signed an agreement for PureSOx connectivity that extends over the next three years, after which the services and their benefits will be evaluated.

Connectivity based on the ALREM is one part of the PureSOx service agreement for the ACL vessels. Training, yearly inspections, spare parts supply and a sensor exchange programme are also included in the contract. But the addition of connectivity creates new possibilities, Grimaldi said.

“We are eager to start taking advantage of connectivity with our PureSOx systems,” said ACL G4 technical manager Pierluigi Marmo. “Alfa Laval provides us with good service already, but the customised connectivity services will increase our own insight and give us even greater access to the Alfa Laval service organisation. Both of those things will make life easier for ACL and the Grimaldi Group as a whole.”

ALREM will also fit into the Grimaldi Group’s own connectivity plans. The group is working on a proprietary solution to connect equipment across its vessels, into which the ALREM will be integrated. This will ensure all information valuable to the Grimaldi Group is available in one place.

“We’ve seen the value that collected data can offer,” said Grimaldi Group corporate energy saving manager Dario Bocchetti. “By evaluating data from the current data logging system, for example, we’ve realised that PureSOx releases even less SOx than if we were sailing on MGO. With a fully connected solution based on the ALREM, such analyses will be far easier to perform.”

Mr Bocchetti sees the potential for making further use of the PureSOx scrubbers across the Grimaldi Group. “Connectivity is useful for seeing where we are and demonstrating our compliance easily, but it will also be beneficial for our operational levels down the road,” he explained. “The more Alfa Laval can help us learn from the data, the more we can help our crews to understand our PureSOx systems and operate them in an optimal way.”

Alfa Laval launched its PureSOx Connect portfolio of data-driven services for its SOx emissions scrubber product line at SMM in September 2018. Its manager of service gas systems Olaf Van Heerikhuizen said “PureSOx Connect can save time for crews today, plus help customers predict maintenance needs and reduce operating costs over time.”


 

Yara warns of industry scrubber corrosion concerns

Yara Marine Technologies chief sales and marketing officer Kai Latun has warned that operators could be facing corrosion of scrubbers in as little as three years’ time as some scrubber manufacturers choose cheaper materials over more expensive corrosion-proof material.

He said “Scrubbers are exposed to sea water, temperature variations and sulphuric acid – which is a perfect storm for corrosion.”

Yara itself uses a very tough high nickel alloy (steel) which does not corrode. “It costs a bit of money, but we do not want to use lower quality. We are quite confident that ship owners appreciate that we can give much better quality and have scrubbers that last the lifetime of a ship”.

He said he believed in two or three years the industry would start to see replacement scrubbers due to corrosion – which would be a “horrendous cost”.

He elaborated “That is my big fear – with a booming scrubber market there are a lot of new entrants. Some are ok, but some are after quick profits.” While he said there are serious scrubber suppliers with good references in the industry, some companies are using low-cost materials which he does not think will withstand corrosion.

He said “I am afraid for shipowners fighting for survival in a tough market, where it is very tempting to cut down technical staff, cut costs, focus on capex and only select cheap scrubber solutions.”

He warned “I am afraid we will soon start to hear stories of corroding scrubbers which may kick back on the whole scrubber technology as some people will start to say scrubbers don’t work.”

He is trying to raise awareness in the shipping industry of this risk.  

Mr Latun summed up “The scrubber industry as a whole will get hit if there are a lot of low-quality scrubbers installed out there.”

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