Scrubbers are not a ticket to ride: Paddy Rodgers

Scrubbers are not a ticket to ride: Paddy Rodgers

Shipping industry leaders, joined by Goldman Sachs, discussed IMO 2020 challenges and opportunities at an ABS panel discussion held at the start of SMM 2018.

Christian Lelong, senior commodities analyst at Goldman Sachs; Aaron Bresnahan, vice president marine solutions, Wartsila; Paddy Rodgers, CEO of tanker giant Euronav; Wolfgang Hintzsche, marine director at the German Shipowners’ Association; Lars Robert Pederson, Bimco’s deputy secretary general and moderator Kirsi Tikka from ABS explored IMO 2020 from multiple perspectives.

The panelists offered keen insights on a wide range of issues including the cost and quality of fuel oil, the business case for investing in LNG or scrubbers; operational challenges, issues with enforcement; bunker fuel availability and the vital role of refineries.

Lelong opened the session, detailing Goldman Sachs’ research on the impact of the sulfur cap, titled IMO 2020 Towards a New Equilibrium.

He said: “We are becoming more positive on scrubbers; production capacity is increasing and may surprise us. In a perfect world the industry would have made investments over a time longer period than two years. Any more regulatory uncertainty will mean we will not get the lowest cost solution for the economy but the market will eventually balance.”

Bresnahan from Wartsila remained bullish on LNG as a fuel, telling delegates: “The technology will be available for whatever choices shipowners make. We support LNG even though its adoption has been slowed by the classic chicken and egg problem of supply and demand. Some of the recent choices by big shipowners have been a step forward because we will need LNG infrastructure to service bigger ships.”

Rodgers from Euronav had some stark words of warning regarding scrubber take up.

“Scrubbers are not a license to burn fuel oil. You are compelled to monitor and report what you do. I think we are heading into territory similar to the oily water separator regulations where you could be penalized regardless of the fuel burnt. The idea that scrubbers are a ticket to ride is a misnomer,” Rodgers said.

Pederson from Bimco stressed the importance of authorties clamping down on fuel suppliers come 2020.

“MARPOL contracting governments will need to do what they committed to and take action when the fuel supplied is not what is specified. I think the problem in 2020 is going to be the quality of blended fuel and we are bound to see more cases of fuel quality issues,” Pederson maintained.

Tikka from ABS said she believed the sulphur cap will have the biggest impact on the industry since the phasing out of single hull tankers.

“This will be felt well beyond shipping, affecting the refining and power industries as well as ultimately consumers,” Tikka warned.

Splash is reporting from SMM in Hamburg all week. 

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.

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1 Comment

  1. Andrew Craig-Bennett
    September 4, 2018 at 6:52 pm

    Paddy Rogers has it right.