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Scrubber technology the most economic option for shipowners: BP Singapore

Scrubber technology is the most economic option for shipowners who are looking for alternatives to cope with the increasingly stringent environmental regulations the shipping industry is facing, BP Singapore Country President Terence Yuen said during the week.

Yuen spoke about global caps as mandated by the International Maritime Organization at the 18th Singapore International Bunkering Conference and Exhibition.

Come January 1, 2015, the International Maritime Organization has mandated that the sulfur cap for the shipping industry will be 0.1%, down from the current 1%, in emission control areas.

Scrubber systems are air pollution control devices that can be used to remove some particulates and/or gases. Onboard a ship, scrubbers are installed on ships’ engines to remove sulfur from bunker fuel.

“Abatement technology” is the “most economic” for seaborne transport outside the ECA zones and is the “least disruptive,” Yuen said.

There are around 106,000 vessels globally, and to date, there have been more than 50 orders for scrubbers and this continues to grow every month, he said.

In terms of LNG-fueled vessels as an alternative, there have been more than 80 LNG vessels either ordered or already in service, he added.

Installing scrubbers would also mean that if the global sulfur cap as mandated by the IMO does drop lower, shipowners would already be ready for that change, he added.

At present, IMO has proposed the global sulfur cap to drop from the current 3.5% to 0.5% on January 1, 2020, though this is dependent on the outcome of a review in 2018 on whether there is available supply in the global market.

The 2020 deadline could potentially be deferred to January 1, 2025, the IMO has said.

Shipowners currently have three main alternatives to cope with the mandate: utilizing marine distillates, installing scrubbers onboard their ships so that they can continue using heavy fuel oil in their engines, or waiting for LNG bunkering infrastructure to develop for long-haul voyages, market sources said.

Marine gasoil is also expected to play a bigger role in “enabling the shipping industry” to comply with these mandates, Yuen said.

However, this would mean that distillate supplies would have to be diverted from the land fuel sources to the marine fuel market, he said.

Depending on how the economics work, it might result in marine gasoil prices increasing due to competition with the land fuel market for supply, he added.
Source: Platts

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