Debate on scrubber economics ‘all but gone now’

Whether an owner will ever achieve full payback for a scrubber is now debatable with the price gap between high and low sulphur fuel staying stubbornly narrow all year, coupled with higher maintenance costs for these exhaust gas cleaning systems than originally estimated.

Peter Sand, chief shipping economist at international shipowning organisation BIMCO, has crunched the numbers and yesterday suggested the narrowing of the price gap between high and low sulphur fuels means that the spot market earnings differential for a capesize bulker – scrubber versus no scrubber – on January 3 this year compared to August 7 has declined from $7,626 a day to just $1,095 a day.

The bunker price spread has remained below $70 per tonne for most of the year, far below the $150 differential cited last year as the outlier in terms of payback times.

“The debate on scrubber economics is all but gone now,” Sand said yesterday.

What was extremely misleading from the beginning is that the scrubber fitting was a paper exercise

Last month, Stamatis Tsantanis, CEO at capesize owner Seanergy Maritime, hit out how shipping had been hoodwinked by ill thought out scrubber economics.

Speaking to Noble Capital Markets, Tsantanis said: “What was extremely misleading from the beginning is that the scrubber fitting was a paper exercise – you just pushed a certain button and you would lock in to certain spreads and you would make a certain profit. That is totally not the case.”

The Greek owner said the payback period for a scrubber had been anticipated at 6 to 12 months, but the CEO said the timetable is now closer to five years.

The changed fortunes have also manifested among scrubber manufacturers. During a Q2 results presentation last month, Wärtsilä CEO Jaako Eskola said: “Today the fuel [price] spread between high sulphur and low sulphur fuel is so low that the retrofitting order intake in scrubbers is pretty much almost zero.” Wärtsilä is one of the world’s largest scrubber manufacturers.

The issue of payback times for this equipment is clouded further by maintenance costs.

At a Maritime CEO Forum from 2018, Bjørn Højgaard, CEO of shipmanagement giant Anglo-Eastern, warned that scrubbers are sensitive pieces of equipment sitting in the hostile, hot and acidy environment of a ship’s funnel.

“There are going to be plenty more maintenance issues than people expect,” Højgaard told the exclusive shipowner gathering. He went on to recount how one car carrier owner he knows had budgeted $10,000 a year in scrubber maintenance per ship. In the first year alone that owner had to spend $100,000 in scrubber maintenance per ship.

Norwegian P&I club Gard stated in a note to clients last October that it has seen a few incidents where within 10-15 months of an open-loop scrubber being installed, corrosion of an overboard distance piece or in its immediate vicinity has resulted in water ingress into areas such as the engine room, ballast tanks and cargo holds.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.


  1. Has the IMO been talking about limiting co-emissions, too? It’s my understanding that scrubbers also reduce fine particulate emissions.

  2. Very good news – the economics of scrubbers were doubtful from the start and the huge questions marks which still linger over the discharging of dangerous sediments and waste straight into the sea still need to be fully investigated. The sooner that open loop scrubbers are banned, the better. Now that M&R also comes into play then the game is up and IMO 2020 can return to what was intended – using cleaner fuel.

  3. LSFO was always going to have a low price difference to HSFO once demand was there.

    Just try and buy “leaded” fuel for your car, once unleaded fuel became the norm for motor vehicles, LSFO will likely become the norm for ships (until the GHG aspect comes in)

    HSFO will go the way of the dinosaur in a short period of time.

  4. I feel bad for many bulker owners who believed the overly rosy ROI’s presented by the scrubber manufacturers without highlight the associated complications and difficulties in operating scrubbers. Fortunately as tanker operators we had a better understanding by virtue of having operated the IG plants to take a more holistic approach when deciding on the best way to comply with Sulfur Cap 2020. We felt confident that a spread of close to $200 between LSFO and HSFO was unsustainable over a long period view the expected large drop in demand for HSFO which would make it a novelty item. Armed with the experience from having operated scrubbers with a clearer vision of associated risks and associated maintenance, along with somewhat robust assessment of fuel price trends, we simply decided to steer clear of scrubbers and adopt compliant fuels. Unfortunately, some bulker / container operators may not have access to complete information when simply viewing the proposals from scrubber manufacturers. Fortunately the direction we took turned out to the right one so far.

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