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Odfjell Says Scrubbers don’t make sense for IMO 2020

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Odfjell Says Scrubbers don't make sense for IMO 2020

Chemical tanker firm Odfjell said in a statement that it will not invest in scrubbers to clean fuel on its vessels in order to comply with new stricter emission rules from 2020.

Odfjell instead plans to use compliant fuel which meets the new standards. The International Maritime Organization (IMO), the United Nations’ shipping agency, has set global regulations to cap the sulphur content in marine fuel, known as bunkers, at 0.5 percent, down from 3.5 percent now. This was done to combat air pollution.

Shipowners have the option to either install scrubbers, which clean the cheaper high sulphur fuel oil, or buy costlier marine gas oil.

“Our conclusion for the moment is that it does not make sense for Odfjell (to install scrubbers),” CEO Kristian Moerch said at an oil and offshore conference on Thursday.

“They are not as easy animals to operate as most people will make them, so we need to make sure we understand the technology. But at the moment we don’t think scrubbers make sense.”

“First of all our fleet spends around 50 percent of its time in ports, then scrubbers are pointless, and the second part is that 60 percent of our revenues are covered by contracts with our customers and they have bunker adjustment clauses,” Moerch said, referring to compensation for any rise in bunker prices.

He said he also thought this was the responsibility of the oil industry to bring out clean fuel.

“Fundamentally I really don’t see why the shipping industry should solve a problem the oil industry have.

“Everything comes back to if you believe this spread of $300 (of high sulphur fuel oil vs low sulphur fuel oil) will stay or not,” Moerch said.

Odfjell currently owns and operates in total 85 chemical tanker vessels.

Photo courtesy: https://www.odfjell.com