Scrubbers' future hinges on carbon capture

The International Maritime Organization's (IMO) requirement for vessels to reduce CO2 emissions could dampen investments in marine exhaust scrubbers unless they are redesigned to capture carbon while remaining cost competitive with low-carbon bunkering options.

The IMO in June set carbon intensity reduction targets that require ships to reduce CO2 emission by 40pc by 2030 from 2008 base levels. For scrubbers to remain a viable investment, they need to be refashioned to capture and store CO2 in a way that is cost competitive with low-carbon versions of ammonia, hydrogen and methanol as well as biofuels and LNG.

The IMO allows ships that burn high-sulphur fuel oil (HSFO) to use scrubbers to remain compliant with its January 2020 regulation capping marine fuel sulphur content at 0.5pc. Scrubbers are designed to capture sulphur oxide (SOx), nitrogen oxide (NOx) and particulate matter, but not greenhouse gas emissions. A study conducted by consultancy CE Delft showed that the use of scrubbers boosts CO2 emissions by 1.5-3pc because of the additional fuel required to operate the scrubber.

Scrubber manufactures such as Alfa Laval, Wartsila, Teco 2030, Value Maritime and Yara Marine are developing scrubbers that capture CO2. The IMO would allow for the use of on-board carbon capture and storage technology to meet its 2030 target, but has not yet developed guidelines. It is currently looking into guideline proposals from member countries.

The cost of capturing and storing CO2 is a moving target. A 2021 paper penned jointly by the Massachusetts Institute of Technology and ExxonMobil pegs the cost at $4-45/metric tonne (t), depending on scale and transportation costs, among other factors. Burning 1t of HSFO emits about 3.151t of CO2,so carbon storage and capture could add between $12.60-141.80/t, or between 3-36pc to the current cost of HSFO of about $400/t in Rotterdam. But fueling ships with low-carbon fuels appears far more expensive.

Argus pegs the cost of grey ammonia as an alternative marine fuel at $1,056/t premium, or 264pc of the cost of HSFO in northwest Europe. The cost of green ammonia exceeds HSFO by about $2,262/t or 565pc. LNG as an alternative marine fuel currently exceeds HSFO by about $417/t or 104pc, and fatty acid methyl ester (Fame) biodiesel exceeds HSFO by $2,058/t or 514pc.

In the eight plus years until the 2030 CO2 regulation takes effect, carbon capture and storage costs are likely to stabilize, and green ammonia prices could drop as the cost of renewable electricity used for its production declines. If scrubbers with CO2 capture capabilities gain traction, they could breathe new life into the HSFO bunker market, which saw consumption drop last year.

By Stefka Wechsler