Clarkson: In 2020, 12% Of Global Ships Will Install Desulfurization Equipment

- Mar 27, 2020-

Clarkson said that when the 2020imo sulfur limitation regulations come into effect, the proportion of ship capacity installed with desulfurization equipment will reach 12% (in terms of GT, the same below), while by the end of next year, the proportion will reach 15%.

More than 10% of the world's ships will be equipped with exhaust scrubbers by the time the International Maritime Organization (IMO) 2020 sulfur limit comes into effect early next year, Clarkson's data show. However, for large vessels such as VLCC and Capesize dry bulk vessels, the installation rate of desulfurization equipment will be higher, up to 20%.

Although there is still a heated debate about the merits and demerits of the technology, owners have increased orders for scrubbers on about 400 other ships since the beginning of this year, bringing the total number of vessels fitted with the equipment to about 4000, the brokerage said.

At the same time, Clarkson points out that this is significantly more than the number of ships that will be equipped with LNG fuel as a solution. At present, LNG fuel solutions are still mainly limited to LNG carrier market.

Supporters of desulfurization equipment

According to Clarkson, Scorpio Group is currently the ship owner with the most desulfurization equipment installed, followed by Star Bulk, Mediterranean Shipping MSC and the fleet of Greek ship owner John Angelicoussis.

The container shipping company EVA shipping of Taiwan ranked fifth, followed by another Greek ship, Cardiff marine, luxury cruise giant carnival, Eastern Pacific, and COSCO Shipping, which recently announced that it would install desulfurization equipment on 23 ships, followed by Greek shipowner Marmaras navigation.

Steve Gordon, managing director of Clarksons research, said that according to the latest updated data, by January 1 next year, 12% of the capacity will have scrubbers, which will increase to 15% by the end of 2020.

For larger vessels, this ratio will be 23% for VLCC and 35% for Capesize, and 20% for Capesize dry bulk vessels and 26% for Capesize dry bulk vessels.

In other emission reduction schemes, LNG is also a feasible alternative fuel. But at present, the trend of LNG as fuel seems to be weakened.

According to the data provided by Clarkson, at present, only 3% of the world fleet can use LNG fuel, and the proportion of new ship orders is relatively high at 16%. "We estimate that by 2020, between 3% and 4% of the world's ships will use LNG fuel, but most of these ships are in the LNG transportation industry," Gordon said

The infrastructure of LNG is increasing. In the past five years, the number of ports with LNG filling stations has increased from about 20 to about 100.

In addition, in the field of vlgc, more and more ships begin to choose LPG as fuel.

According to Clarkson data, there are currently about 2223 vessels in operation with desulfurization equipment installed, and another 586 order vessels will be installed.

On the other hand, the number of operating ships using LNG as fuel is 507, and another 143 ships meet the LNG ready requirements; 313 order ships will use LNG fuel, and another 85 order ships meet the LNG ready requirements.

What the shipping industry may encounter in 2020

Gordon also said that the arrival of IMO 2020 may bring some changes to the supply and demand of the shipping market, including possible rent suspension, changes in ship speed, acceleration of ship dismantling, and changes in the transportation pattern of the oil market.

"Our analysis shows that in 2019, the downtime for retrofitting and installation of the scrubber will be 0.5% to 1.4% less than the annual capacity. By 2020, this trend will slow down, which is expected to be between 0.3% and 0.7%.

In fact, according to a special report on the market of desulfurization equipment issued by Clarkson on June 26, a considerable number of ships were pulled out of the market because they went to install desulfurization equipment, which once pushed up the freight market of oil tankers, dry bulk cargo and container shipping market.

Combined with the 20-year low of new ship orders and the possibility of slow sailing due to the rising oil price next year, we find that the supply of shipping capacity may reach the best level in the past 15-20 years.