Trafigura highlights the need for higher clarity on scrubber rules

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One of the options that shipowners have in their hands in order to comply with the IMO 2020 sulfur cap is installing scrubbers on theirs ships to continue consuming 3.5% sulfur fuel and avoid the complications that 0.5% sulfur fuels may bring. Despite the positives of this option, there are also negatives such as the high cost of initial investment, the uncertainty about the payback period and the unclear availability of 3.5% sulfur fuels. Trafigura adds one more important issue in the list of uncertainties and calls the industry stakeholders to add more clarity on the rules which regulate the use of scrubbers.

We have seen during the recent months various ports in the USA, Europe and Asia to have introduced bans on the use of open-loop scrubbers, while China has completely banned wash water discharge in its ports. On the other hand, other countries like Japan believe that open-loop scrubbers do not contain any risk for the environment and they allow the use in their waters, at least for the time being.

In countries where the open-loop scrubbers are banned, vessels will need either to consume 0.5% sulfur or utilise hybrid scrubbers. Given the high cost of the investment, the risk shipowners are taking from the uncertainty on the existing rules is very high. It is not only the fact that each country may have its own different rules creating confusion but also that those rules may change from time to time.

Ben Luckock, co-head of oil trading at Trafigura mentions that the industry needs clarity on this matter. “People have been investing knowing what the rules are. What you can’t do is continuously change the rules, that won’t really work well for the industry. All we need is clarity, if you get the rules, you can live with the rules,” he noted.

Trafigura is expected to utilise a mixed strategy of both installing scrubbers and consuming low sulfur bunker fuels in order to comply with the IMO 2020. Subsequently, the company has invested in the installation of scrubbers on 38 of its oil tankers, ranging from MRs to VLCCs, which are currently under construction.

Being compliant with the rules is not a choice, Luckock says. However it looks like there is not any complying strategy which gives confidence to shipowners so far. After the long list of uncertainties arising from the use of 0.5% sulfur fuels, Trafigura comes to show that shipowners encounter also the uncertainties arising from the use of scrubbers and their future functionality.

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