With just 85 days until the IMO 2020 fuel rules come into force, an influential figure has issued a hard-hitting warning of the reputational risks for the industry by widespread use of so-called open loop exhaust gas scrubbers.
Morten Arntzen, a veteran ship financier and executive, said the issue risked provoking attacks by environmental campaigners from Greenpeace and Swedish teenager Greta Thunberg, who has inspired millions to protest on green issues worldwide.
“I think there is going to be a huge PR risk with scrubbers,” Arntzen told the TradeWinds International Shipping Forum in Bermuda on Monday. “In some ways scrubbers could be for shipping what vaping is for smoking industry.”
He added: “It won’t be long until Greenpeace and Greta Thunberg come after the open-loopers for that.”
Arntzen is currently executive chairman of Team Tankers and an advisor to Australia’s Macquarie Bank. Previously he was chief executive officer of tanker giant Overseas Shipholding Group and before that head of transport at Chase Manhattan.
Scrubbers take sulphur and some particulates out of engine exhaust by passing it through a mist of water, which in open-loop scrubbers is pumped into the sea. Scrubber makers and users claim the wash water is comparatively benign, but some studies have warned harmful pollutants are discharged.
Interviewed at the forum by Tradewinds’ Joe Brady, Arntzen said scrubbers would present challenges for shipowners who have installed them, while the financial returns may be less than some have forecast.
“Scrubbers are going to be an earnings disappointment for a lot of companies. I think there are going to technical and regulatory risks that make that a lot more challenging than they expect,” he said.
Speaking on a subsequent panel, International Seaways chief executive Lois Zabrocky hit back at Arntzen’s argument.
“I take exception what Morten’s said on srubbers,” she said. “Scrubbers are just one piece of the solution to the environmental issues.”
International Seaways is one of the successor companies to OSG after it when through bankruptcy restructuring. Under Zabrocky’s leadership, it is installing open-loop scrubbers on its 10 modern VLCCs, which is “part of our long-term plan” to reduce emissions, she said.
“It takes all hands to make the big changes happen.”
Arntzen said his comparison of open-loop scrubbers to vaping was based on a sound argument.
“Bear with me,” he said. "When vaping first came out it was a healthier, safer transition from smoking. And now we are learning it puts a lot more in your lungs, and it may lead to fatalities and sickness.
“When open loop scrubbers first came out some of the banks gave green loans for scrubbers because they wanted to be called sustainable lending banks. But nobody puts open loop scrubbers on their ships to clean the environment.
“They do it to capture a fuel spread for a period of time. They profit by putting sulphur and perhaps other toxic material in the water.”
Bermuda has a ban on the use of open-loop scrubbers in its waters.
Francis Richardson, chief executive of the Bermuda Shipping and Maritime Authority, said this was driven by awareness on the Atlantic island of the threat of climate change and concern of the intensity of tropical storms.
