Scrubbers: Are you ready for the heat?
Scrubber suppliers confirm the trend behind recent announcements – ship owners are finally making investment decisions. But the scramble for installations ahead of 2020 will create winners and losers, writes Stevie Knight.
“I think the 2020 sulphur cap is a train crash in the making, and we need to be strict with the owners,” says Don Gregory, director of industry group the Exhaust Gas Cleaning Systems Association (EGCSA). “The ones that get stuck on the bumpers because they haven’t made the right decisions should be left to simply face the consequences – whether that’s delays or detentions.”
Owners have had 10 years’ notice of the rules change, Gregory adds. “We can’t allow them to hold everything and everyone else up while we rescue them.”
Gregory recognises the issues that have held owners back from fitting scrubbers, not least the parlous state of their coffers along with long discussion about whether the sulphur rules would change in 2025 instead of 2020. Of course, the Ballast Water Management (BWM) Convention debacle meant that a lot of people lost faith in IMO’s deadlines.
Anders Skibdal, CEO of Danish scrubber company Pureteq explains: “We’re experiencing a long-awaited increase in scrubber demand. Ship owners are realising that this isn’t going to be a cut-and-paste rerun of the BWM mess and that the legislation is in fact going to be in place on 1 January 2020.”
Neil Anderson, director of marine technologies, LAB, agrees: “People are realising the deadline isn’t going to be pushed back. But there could be a problem. To date less than 600 scrubbers have been fitted. That’s not a lot considering the size of the fleet that’s going to be caught up by the legislation.”
But incoming orders suggest that owners are making decisions both in retrofit and newbuilding sectors, says Sigurd Jenssen, director, exhaust gas cleaning, Wärtsilä Marine Solutions. “We are starting to see the market wake up,” he says. “Last summer, orders started pouring in on the newbuild side. In 2017, more than 70% of newbuild projects had scrubbers – and interest is still rising.”
This year, that’s being overtaken by retrofits, says Jenssen. “Now we’re seeing the main volume is in that area, roughly 60% to 40%”
Yara Marine Technologies’ CEO, Peter Strandberg, adds that after an unexpectedly slow uptake, there will soon be queues at shipyards. “As installation takes roughly a year from start to finish and some shipowners have a few hundred vessels in their fleet, this will quickly pile up,” he predicts.
What will happen if installation capacity cannot satisfy demand? “It will certainly not be possible to install in all the vessels eligible for scrubbers by 2020,” says Skibdal. “Already many ship owners are planning to have scrubbers installed in 2021 and beyond.”
Anderson continues: “Even if you take all the scrubber manufacturers, they can’t fit 20,000 ships or more before the deadline, so it’s clear that a significant proportion are planning to run on compliant fuel, and then when or if they feel the pain, they’ll change over to scrubbers and heavy fuel oil (HFO).”
But quantifying ‘pain’ rests on calculating payback. Most suppliers suggest between one and three years until lower fuel costs offset scrubber investment, given the current market. Erik Haveman, global sales director, exhaust gas cleaning systems, Alfa Laval, notes that If the price of HFO drops after 2020, which many experts and studies are suggesting, a vessel with high fuel consumption could pay back in less than a year.
Anderson of LAB digs a little deeper: “If we look at the current differential of around US$230 a tonne, a bulk carrier burning an average of 50 tonnes of fuel a day will see payback anywhere within one to two years. At the end of last year, it was US$200 a tonne and if it’s over that I’d say, scrubbers are very plainly feasible... The fact is, nobody knows [what the spread will be] - and that doesn’t help owners facing a huge capital investment.”
Devon Smith of Pacific Green Technologies thinks realistic support will ease the way: “Cost is a barrier,” he admits. “A lot of shipping companies are short on cash... so we are offering a financing package to help things along.”
In late 2016 UK ship owner Union Maritime signed a deal to pay for a scrubber from Pacific Green with the money it saved from continued use of HFO in emission control areas. The ENVI-Marine scrubber was fitted to the main engine of 13,000dwt chemical tanker Westminster in the first quarter of 2017. At the time the scrubber was anticipated to save an expected US$2,700 a day, and earlier this year the owner took up options for similar installations and financing plans on seven newbuilds - four 45,999dwt chemical tankers being built by Hyundai Heavy Industries’ Marine Division in South Korea and three 64,000dwt bulk carriers being built by COSCO in China.
Skibdal notes that for many vessels, scrubber savings are a “no brainer”. He also argues that while this currently tight market makes investment an issue, the price gap will increase the closer 2020 draws. As a result, financing will be more forthcoming when banks themselves start to see the business case emerge.
But Skibdal adds a note of warning about leaving it late: “Lead-time is steadily increasing,” he says.
This is now an issue, agrees Martin Koller, product manager at Austrian emissions abatement technology company Andritz. “We have only 18 months till 2020 and the delivery time of components is increasing due to the start of the rush,” he says.
Andritz is its own key component manufacturer and has global manufacturing sites, Koller reports, and long-term partnerships with most suppliers help secure delivery spots. But the days when you could get a scrubber in half a year are over, he says. Order now and it’ll take a year.
He is not alone in his view. Nils Homburg of Saacke predicts challenges, “both on the supplier side as well as from the installation and yard side”, inevitably leading to longer delivery times and rising system prices.
Meeting demand won’t be simple. Don Gregory of EGCSA says the materials themselves will come under pressure when it comes to sourcing corrosion resistant, high-end steels. The response to this lurking trouble varies.
Strandberg explains: “[Yara] still relies heavily on Sweden and Germany for most of the material but with the demand we are experiencing we need to continuously look at the supply and how to adapt to the market needs. We have spent considerable time securing distribution from a much bigger network of suppliers both in Asia and in Europe.”
Haveman reports Alfa Laval, which produces a lot of its own components, “is ramping up its resources” to meet future demand. Its Chinese facility in Qingdao is preparing to increase production of stainless steel products significantly. Still, there’s a word of warning: “We already see delivery slots running out,” he says. As a result, the company has already begun to look for prior commitment from its customers.
Homburg too sees issues ahead: “Sourcing of high-end materials is key to keeping delivery times short. However, this requires committing large amounts of capital on the supplier’s side - more than €100,000 per tower.” Cash-flow might therefore limit this strategy for smaller players.
Skibdal remains sanguine about Pureteq’s plans. “Material can be made at steel mills with nine weeks’ notice [and] we have approved a number of manufactures to produce our scrubber towers,” he says.
LAB’s approach can sidestep the materials lead-time issue, notes Anderson. Alongside the range of steel scrubbers, LAB has come up with a line of composite, corrosion resistant units. “We do have a range of steel units, but I’d say a composite scrubber fitted outside the funnel is easier to maintain and service, boosting payback and reducing lifecycle cost. This is an appropriate technology for most big tanker, bulk and container ships which is where the greater part of the market now lies. Plus, it is 20-30% lighter than high-end alloy so it simply doesn’t have the same weight issues, which reduces load and is more fuel-efficient.”
Preparations are not all about the hardware. Wärtsilä is presently on a recruitment drive for installation engineers, while Strandberg explains that for Yara too, “finding the right people with the right background has been critical”.
Scrubber designs very widely and include some useful niche applications. Alongside the usual ‘wet desulphurisation’, Koller explains that Andritz also has a dry solution. “As a rule of thumb, I would say, that the dry technology is recommended for ferries and small merchant vessels operating on coastal lines.”
Still, wet varieties dominate. These cluster around inline (‘I’) or bypass (‘U’) designs. The basic difference is that the first stacks the process vertically while the other pushes it round a bypass, so generally ‘I’-designs offer a taller, slimmer outline compared with the lower, fatter ‘U’-type.
Many manufacturers offer both ‘U’ and ‘I’ designs, but the inline, ‘I’-design tends to be taken up by vessels with more complex structural needs. A significant amount of the initial interest came from the cruise and ro-pax segments. Alfa Laval points out this type demands a little more finesse since the absorber section sits above the jet section and requires an internal water trap.
Inline scrubbers, however, are not limited to passenger ships, particularly as the footprint and weight of retrofits is often a prime concern. Strandberg says: “We usually recommend the inline scrubber. With its design its highly effective and at the same time leaves a much smaller footprint on the vessel than other designs.”
While the passenger ships were amongst the first to adopt the ‘I’ configuration systems, it is the bigger bulk, tank and box ships, that could make up the majority of installations of this arrangement - “around 20,000 vessels in all” according to LAB’s Anderson.
For some, this allows a slightly different remit. Homburg explains that Saacke has developed a packed-bed reactor in a U-type tower and says: “We are focusing on merchant vessels where we believe this offers the most reliable solution, as each emitter is equipped with a bypass.”
Haveman says Alfa Laval’s U-design scrubber is particularly useful “for tanker, bulker and container vessels, where fuel consumption is high” and adds it is “the most reliable system on the market”. It might seem a little presumptuous, but underpinning the claim is an estimated (total U&I) 1.5 million operating hours.
Whether inline or U-type, the treatment cylinders themselves still vary significantly. Each manufacturer has its own take on the best diameter and height for the optimal gas velocity and processing time, entry points and contact with the alkali via a packed bed, plate or spray tower, each having different heat exchange, nozzle or flow designs that aim to raise the efficiency of the interface between gas and liquid.
There are ‘tweaks’. Some, like Pureteq, incorporate a quenching system that cools the exhaust sharply, making for effective SOx removal, while Ionada diverts the flow over membranes, something which allows for a smaller footprint.
Several are aiming for retrofit flexibility, A cylinder is not always the most useful form, says Smith of Pacific Green. “A rectangular shape means you can play with the footprint more easily,” he says.
Koller, on the other hand, says Andritz has “the smallest scrubber on the market at the moment, which can be adjusted to the available space”.
Yara is also producing mini scrubbers along with flexible height and breadth dimensions. “We specialise in more custom-made solutions than many of our bigger competitors,” adds Strandberg.
Wärtsilä is looking at modular construction, Jenssen explains. “From our perspective, if each installation needs to be tailored, it will raise yard time. Therefore, if we can standardise and deliver modular solutions, it should help owners avoid at least some of the bottlenecks.”
Many solutions aim to consolidate exhaust streams – from multiple engines and boilers, for example – through a single scrubbing system, known as multi-stream as opposed to single-stream systems. But multi-streaming can be a tricky business, says EGCSA’s Gregory.
“You need some method to stop gases entering the scrubber from passing back down an exhaust duct of an engine or boiler which is not running and allowing oxygen depleted exhaust gases into the engine room,” Gregory explains. “This normally entails large double valves, with a pressurised section between the valves adding to the costs and bulk.”
There is a breath-taking array of scrubber designs on the market, especially considering the relatively low number of installed units to date. As well as highlighting the ingenuity of the technology suppliers, the multiplicity of designs also serves as a reminder that choosing correctly is not always straightforward – and that finding yard space will not be the only installation challenge.
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