From Lloyd’s List:
” Closed-loop scrubbers are not feasible in international shipping, says PIL”
Executive director Teo Choo Wee holds the view that, without government subsidies or backing from banks, today’s market does not support investments in new tonnage.
Singapore-based box line plans to install open-loop scrubbers on some of its fleet, in spite of port states banning the method within their waters
PACIFIC International Lines, the Singapore-based box ship owner-operator, has ruled out closed-loop or hybrid scrubbers, even as more port states have banned the use of open-loop scrubbers within their territorial waters.
Instead, the family-owned shipping line that ranks among the 10 largest in the world by capacity, has decided to install open-loop scrubbers on some of its fleet.
PIL’s executive director of fleet management, Teo Choo Wee told Lloyd’s List that the box ship player would take a multi-pronged approach in seeking to comply with the International Maritime Organization’s global cap limiting the sulphur content in marine fuel to 0.5% from 2020 and beyond.
Mr Teo remained coy when probed on details pertaining to PIL’s fleet management plan, though he clarified that the intent was to fit ships with high levels of fuel consumption with open-loop scrubbers.
These will include some but not all eight 11,800 teu box ships of which PIL has been taking delivery from Yangzijiang Shipbuilding Group since 2017.
He also added that PIL did not plan to fit scrubbers on ships that are chartered to third parties, including its alliance partners. The shipping line has a cross-charter arrangement that extends to its 11,800 teu newbuilds with Cosco Shipping.
Elaborating on the rationale for sticking with open-loop scrubbers, Mr Teo said that it simply did not make “commercial sense” to go with closed-loop or even hybrid units.
Without a doubt, closed-loop scrubbers cost far more than open-loops.
But he explained that the cost of scrubbers had not featured highly on the list of considerations when making the decision.
PIL made the call after an internal study on the options available to comply with the IMO sulphur cap flagged three far more pertinent concerns.
It is not feasible to store the large volumes of water that scrubbers require on board ships over long voyages.
Vessels can use hybrid scrubbers that can switch between closed- and open-loop modes. However, a large part of any ocean-going voyage falls outside port limits and this would not justify the higher cost of investment in a hybrid scrubber, according to Mr Teo.
Additionally, the bigger issue for shipping lines is how to streamline ship operations.
Mr Teo does not see the point of burdening the crew with the extra tasks that will come from using closed-loop and hybrid scrubbers. These include disposing of the washing water and switching scrubbers to closed-loop modes within port limits.
Conversely, he argued that it was more logical for ocean-going box ships to take another alternative — that is, to combine the use of a high-sulphur oil with open-loop scrubbers in the high seas and switch to sulphur cap-compliant fuels once these vessels enter port limits.
He added that PIL intended to use low-sulphur fuel oil to power “older and smaller vessels” on its fleet. Where LSFO blends compatible with ship engines are not available, the shipping line will go for low-sulphur marine gas oil that is more commonly offered at ports around the world.
He holds the view that today’s market “does not support investments in new tonnage until excess capacities are digested”.
“Unless you have subsidies from the government or the backing of the banks, it’s not the right time to invest in new tonnage or ships that run on alternative fuels like LNG.”
PIL has played its part in helping trim global box ship capacity. “We have scrapped some old vessels recently and plan to retire more older tonnage on the fleet.”
Mr Teo said that those ships being considered for retirement were generally smaller units that service regional trades.