Half of respondents to a poll on the best compliance option with the 0.50% sulphur limit in 2020 and beyond think low sulphur fuel oil will be the best solution, while LNG scored a much higher share of votes than abatement technologies.
Furthermore, few seem to think that as much as 1,000 vessels will be fitted with scrubbers before 2020 with most thinking it will be the mid-2020s before that number is reached.
This was the result of polls put to delegates at IBIA’s Annual Convention in Singapore in November, during two different sessions.
One of the polls was put to the audience during a session on LNG and methanol as alternatives to traditional marine fuel oils, where we had presentations from Alan Lim, Deputy Director (Port Services) at the Maritime and Port Authority of Singapore talking about Singapore’s global LNG strategy; from Goh Tiak Boon, Head LNG New Business, Pavilion Gas, talking about drivers and challenges of LNG; from Capt Walter P. Purio, Chief Executive Officer, LNG Marine Fuel Institute, who spoke about the nascent role of LNG as a marine fuel in Australia; and from Christopher D. Chatterton, Chief Operating Officer, Methanol Institute, who explained the pros and cons of methanol as a shipping fuel.
The poll question and results were as follows:
Which of the following solutions are most ideal to meet the 2020 sulphur caps and beyond?
Abatement technologies i.e. scrubbers – 8%
Low sulphur fuel oil – 50%
LNG – 42%
Is it possible that the poll outcome was influenced by the speakers painting a positive picture of LNG?
Who knows, but we also had a poll at the end of a presentation by Robin Meech, IBIA Chairman and Managing Director of Marine and Energy Consulting, showing a low expectation for uptake of exhaust gas cleaning systems (EGCS), or scrubbers, despite Meech presenting compelling arguments in favour of installing them sooner rather than later.
Meech said the take-up of abatement was currently lower than originally expected but was starting to accelerate with more predictions of large price differentials between 0.50% and high sulphur fuel oil in 2020. He also predicted scrubber uptake by will grow steadily after 2020.
In September this year, Jasper Faber of CE Deft, the lead author of the official availability study presented to the International Maritime Organization in 2016 told a forum hosted by IBIA that the study’s forecast for uptake of EGCS was probably too optimistic. He said rather than the 3,800 ships having scrubbers in 2020 used in the study’s base case, burning some 36 million tonnes of HSFO accounting for 11% of total global marine fuel demand, Faber said “we may still see” something closer to the lower level of EGCS uptake predicted in the model. This pegs the number of ships using the technology in 2020 at 1,200 which would burn 14 million tonnes of fuel accounting for 4% of total marine fuel demand.
During IBIA’s Annual Convention in Singapore, Meech put the following poll question to delegates following his presentation, and the results were as follows:
By which year do you think there will be 1,000 vessels with EGCS?
2020 – 14%
2023 – 33%
2025 – 44%
Never – 9%
Also speaking at IBIA’s Annual Convention, after the above poll was conducted, two oil major representatives shared their views on 2020 solutions.
Carlos Torres, Global Head, BP Marine fuels, didn’t give any figures or estimates on uptake of abatement technology, but showed BP anticipating roughly less than 5% of global marine fuel demand from ships with scrubbers in 2020, with more than 50% of demand being met by very low sulphur fuel oil (VLSFO). Initially in 2020, the BP presentation suggests 50% or more of demand being for marine gas oil (MGO), but that this would be shrinking during the year for VLSFO to become dominant. The uptake of LNG, meanwhile, is expected to be minimal according to BP’s current forecast.
Iain White, Global Marketing Manager, Marine Fuels and Lubricants, ExxonMobil, said with maybe around 400 scrubber systems installed to date, maybe there will be around 800 ships ready to scrub instead of using low sulphur fuels in 2020. He too predicted very low uptake of LNG by 2020, as did Robin Meech earlier in the day.
According to all the above speakers – BP, ExxonMobil and Marine and Energy Consulting – the current anticipation is that LNG will play a much smaller role than scrubbers in 2020, and that scrubber uptake will accelerate much quicker to make use of high sulphur fuel oil with scrubbers a much bigger share of the market in 2025 than LNG.
Many of the delegates at IBIA’s Annual Convention, meanwhile, seemed to have doubts about how quickly scrubbers will take off and selected LNG as the second most ideal solution in 2020 and beyond. Low sulphur fuel oil was the clear winner. It is nevertheless interesting how much opinion seems stacked in favour of LNG over scrubbers.
Report by Unni Einemo