Scrubber retrofits being cancelled

Finland-based technology group Wartsila have said that container and dry bulk ship owners were cancelling scrubber retrofits and installations in order to cut costs. Alphatanker has predicted a flood of cancellations, partly to save costs, but also because the collapse in the oil price has eroded the difference between the cost of HSFO and VLSFO.

“Persistent low marine fuel prices will hit the fortunes of shipowners who have invested heavily to have their vessels equipped with scrubbers,” said Alphatanker.

The difference in price between VLSFO and 3.5% high sulphur fuel oil (which can be used by vessels with scrubbers) has shrunk to $50 per tonne, from $400 per tonne earlier this year, according to Alphatanker.

That has extended the payback time for the $2.5m average investment to four years. Previously it had been just  four months for the largest vessels that had retrofitted the technology.

Alphatanker said in its weekly report that “the question is now rightly being raised over whether scrubber installations will be cancelled. Installations due to be carried out in Chinese yards were already being delayed because of Covid-19.