Scrubbers will help shipping hit greenhouse gas reduction targets
Vessels using heavy fuel oil scrubber systems will have a “positive” effect on global CO2 ...
Japanese transport group NYK has secured a ¥9bn ($81m) syndicated ‘green’ loan, supported by eight domestic financial institutions for the installation of scrubber systems on its vessels.
And Hyundai Merchant Marine said it had signed a MoU to establish a ‘win-win fund’ for scrubber installation, with five South Korean companies investing KRW107bn ($95m) to add to the carrier’s own KRW46bn ($41m) outlay.
NYK’s five-year loan passed all of criteria of Green Loan Evaluation by the Japan Credit Rating Agency, which concluded that the proceeds would be allocated to green projects, “that have explicit improvement effects on the environment”, and that scrubbers where a “highly effective” means to achieve this.
HMM will equip all of its 16 owned vessels with the systems, While its 12 23,000 teu and eight 14,000 teu newbuilds are having scrubbers installed at the construction stage.
Moreover, HMM has been negotiating with the owners of its 62 chartered-in ships for scrubbers to be fitted prior to IMO 2020. A broker source told The Loadstar there had been several amended fixtures involving HMM where the carrier is paying a premium for extensions from next year.
The heavily subsidised carrier, which reported a loss of $720m last year following a deficit of $1.1bn in 2017, is clearly targeting the IMO 2020 regulations as an opportunity for its recovery.
It said: “As the IMO’s new environmental regulation is expected to impose a heavy burden on shipowners, carriers not properly prepared for IMO 2020 will be in huge trouble.
“Thus, HMM will fully prepare for IMO 2020 during the remaining period and will take this regulation as an opportunity for a quantum leap,” it continued.
HMM said investors in the fund would get “first priority” for contracts for the supply of scrubber equipment and installation.
Scrubbers are increasingly being seen by carriers as a cost-effective solution to the IMO’s 0.5% sulphur cap regulations which come into force on 1 January next year.
Indeed, even the biggest critic of scrubbers, Maersk Line, has committed $263m to retrofitting the exhaust gas cleaning equipment on its ships, which, according to Alphaliner estimates, would involve scrubbers being installed on some 50 of its biggest vessels.
Hitherto Maersk said it was planning only “limited trials on a small number of ships”, arguing that “on board mini-refineries are not the answer” to IMO 2020 requirements.
In contrast, Maersk’s 2M partner, MSC, is a big advocate of scrubbers, chief executive Diego Aponte saying the decision is “a no brainer” versus consuming more expensive low-sulphur fuel, or the extremely expensive conversion to LNG, which also comes with bunkering restrictions.
Maersk’s volte face was no doubt influenced by the strategy of MSC – which plans to equip more than 120 of its 528-ship fleet with scrubbers and has recently inked a $440m loan to retrofit 86 of its biggest vessels – and the rush of other carrier rivals, such as Evergreen and CMA CGM, to equip as many of their ships as possible with scrubbers.