Potential Risks of Waiting Too Long for Scrubber Installation

A large ship in the water
What Happens When You Delay Scrubber Installation?

1. Lower Return on Investment
Looking at the average between the highest 400$ initial price difference between MDO and HFO and the lowest-the current projection of forwards of 250$ means that most ship owners will profit from taking an early decision. The Return on Investment (ROI) for installing a scrubber system in 2020 in comparison with doing the same either in 2021 or 2022 is significantly higher. The longer one waits to get scrubbers installed, the longer the payback period will be.

2. Unnecessary high fuel cost
Replacing the current bunker fuel is an expensive process. Low Sulphur fuels are costlier and a whole new fuel-system has to be installed to make ships sail efficiently. With exhaust gas scrubbers, ships can continue to run on the cheap bunker fuel and the existing ship fuel tanks do not need to be cleaned. This would help the ship-owners in reducing the cost involved in switching to expensive low-Sulphur fuel, which has a higher OPEX at over $250 /tonne and a CAPEX of approximately $500k per vessel.

3. Shipyards capacity gets lower
Making a last-minute business decision is very risky. Installation spaces at the shipyards across the globe are likely to tighten in the years after 2020 as more ships opt for EGCS retrofit. Some ship owners believe that the perfect time to get scrubbers installed is right at the end of 2019 which is easier said than done. As 2020, approaches, the whole supply chain will be under a lot of pressure and last-minute orders will be very hard to accommodate. Scrubbers are most often made to measure for a specific ship, and the lead times can be long and getting the systems commissioned and class approved takes time.

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thevisiblestar
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