Scrubber demand speeds up ahead of IMO 2020

About 3,500 vessels will have marine-exhaust cleaning equipment known as scrubbers by the end of this year as demand is rising ahead of new international regulations, a US-based manufacturer said.

The 3,500 total includes about 500 ships from Chinese companies which have recently entered the scrubber market, said president of CR Ocean Engineering Nicholas Confuorto on the sidelines of the IHS-CERAWeek conference in Houston.

The number of scrubber orders "has increased drastically" since June 2018, he said.

With a scrubber installed, a ship will still be allowed to burn fuel with more than 0.5pc sulphur content after the International Maritime Organization's (IMO) global sulphur cap is implemented on 1 January 2020.

Marpol treaty signatories representing almost all global shipping must ensure marine fuel sulfur emissions drop to an equivalent 0.5pc sulfur fuel, down from the current 3.5pc sulfur. The regulations, known as IMO 2020, will increase global competition for lower sulfur distillates and strand sour feedstocks currently sold into the marine bunker fuel market.

Shipping vessels around the globe will have to meet the cap through steps such as switching fuels or installing the emission scrubbers.

The IEA said yesterday that about 5,200 vessels will have scrubbers fitted by 2024. The agency forecast that scrubber installation will run at 1,900 vessels this year and a further 1,500 in 2020, but levels will then fall to about 200 installations a year by 2024 as the fuel oil differential becomes less attractive.

US President Donald Trump's administration raised concerns last fall about the IMO 2020 regulation and potential higher prices for US heating oil and transportation diesel. Complex US refiners, which expect to benefit from cheaper, higher sulfur feedstocks and higher diesel demand, have told the administration the US industry has prepared for the change.