It isn’t an easy call. Retrofitting a vessel with a sulfur-trapping exhaust system called a “scrubber” costs as much as $10m a ship, while cleaner fuels are about 55-percent more expensive than the ones shipping operators use now. Whether it makes sense to install scrubbers and absorb a bigger financial hit upfront depends on whether scrubbers will be adequate to meet even stricter pollution caps expected in the future and the availability and cost of cleaner fuels. Both factors are difficult to gauge.

Scrubbers involve “a complicated and expensive installation of $5m to $10m per ship and the benefit to the environment is still not clear,” said Soren Toft, chief operating officer at Maersk Line, the world’s biggest container operator. “It’s like installing small refineries in approximately 60,000 vessels and it’s not a very sensible way of doing things,”

The deliberations stem from new caps on sulfur emissions, by global regulator International Maritime Organization, that will go into effect in January 2020.

Ships contribute about 13 percent of total sulfur-dioxide emissions, according to the IMO, by burning heavy fuel with a 3.5-percent sulfur content. That is more than 2,000 times the level allowed for cars on U.S. highways. The pollution from burning high-sulfur fuel causes respiratory ailments and can aggravate heart disease, according to the World Health Organization.

The new cap on a fuel’s sulfur content will be 0.5 percent and the change will cost the industry around $40bn, according to maritime executives. Higher fuel costs lead to increased freight rates, which are passed on to consumers.

Read full article