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Scorpio Group to install 100 hybrid-ready scrubbers for IMO 2020

Miami — Scorpio Group will install 100 hybrid-ready scrubbers across its fleet of 56 bulkers and 109 tankers, favoring the larger vessels within each group, chief operating officer Cameron Mackey said Thursday.

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"We have decided to install scrubbers on the majority of our fleet to be ready sometime in 2020," Mackey said during a luncheon presentation at the Association of Ship Brokers & Agents cargo conference in Miami.

Two-thirds of the scrubbers will be fitted by January 1, 2020, and the remainder is expected to be installed during the first three month that year, Mackey said later on the sidelines of the conference.

The International Maritime Organization has mandated bunker sulfur limits to drop to 0.5% sulfur on January 1, 2020, from 3.5% sulfur currently, and the installation of scrubbers allows shipowners to continue using 3.5% sulfur bunkers as the exhaust gas cleaning systems bring emissions in line with the tough 0.5% sulfur limit onboard the vessel.

Hybrid scrubbers have provide the flexibility to either operate in open-loop or closed-loop mode, thereby either essentially washing the sulfur into the ocean or collecting the sulfur onboard the vessel and disposing of it onshore.

"Intellectually, the right thing to do is to remove sulfur at the source and not on the ship," Mackey said. "Intellectually, we don't agree, but there is a period where a scrubber is economically right."

Other compliance options include the use of marine gasoil or low-sulfur bunker fuels, or the installation of dual-fuel engines to use LNG, LPG or methane as bunker fuel.

Scorpio owns and operates 56 drybulk vessels built between 2014 and 2018, including 18 Kamsarmaxes and 38 Ultramaxes. The Scorpio Tankers fleet list comprises 14 Handymaxes, 45 Medium Range tankers, 12 Long Range 1 tankers and 38 Long Range 2 vessels, all built between 2012 and 2017.

Scorpio is the third shipowner this week to announce the installation of scrubbers as means to comply with the global 0.5% sulfur mandate.

French container shipping company CMA CGM made plans public to order several scrubbers for its ships Monday, while International Seaways announced the purchase of seven exhaust gas cleaning systems on its 14-vessel strong VLCC fleet. The company has an option for another three scrubbers covering the remaining three modern VLCCs in its fleet.

Scrubber orders and installations are getting close to quadrupling in 2018 in preparation for the IMO 2020 sulfur mandate from 344 units installed and ordered in January to around 1,200 units so far in September, according to industry sources.

--Barbara Troner, barbara.troner@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com