Shipowners struggling with lower rates can make huge fuel savings quickly by fitting a scrubber, so why do retrofit orders remain muted?
Wartsila’s Tamara de Gruyter, president of the marine systems division, believes there are two factors at play, both relating to uncertainty: geopolitical upheaval and difficult choices on decarbonisation.
“There’s still a lot of uncertainty and cost inflation,” she told TradeWinds.
“I had really hoped the scrubber ordering would pick up way more in 2022 than it did, because if you look at it from a financial point of view, it’s a no-brainer.
“You make the financial calculations and say, ‘Why don’t people do it?’”
The Finnish ship technology giant said in its results statement on Tuesday that profitability was supported by good development in vessel services, while being burdened by fewer scrubber deliveries.
Prices for bunker fuels began to decline in the second half of the year, to the benefit of shipowners and operators.
Due to supply and demand related-issues, the price spread between high and low-sulphur fuels remained around $300 per tonne on average over the latter part of the year.
This improved the business case for scrubbers, but demand has focused mainly on newbuilding installations, Wartsila said.
Owners were reluctant to dry-dock container ships, for example, while rates were at record highs, but this is no longer the case.
Carbon capture coming
The lack of retrofit deals “very much has to do with the uncertainty in the world but also the uncertainty where people are thinking, ‘What is going to be the green journey of my fleet, and does a scrubber fit into that green pathway?’” de Gruyter said.
She revealed that Wartsila has sold its first newbuilding carbon capture-ready scrubbers, which she sees as a way for customers to derisk their choices. The client has not wanted any publicity.
“I do hope that scrubbers are picking up, and if we could link it to carbon capture, it also takes some uncertainty away,” she said.
De Gruyter believes there will be an upturn in orders, but added: “I still need to be proven right.”
She notes an increase in enquiries for the second part of 2023.
“We now need to make sure we translate that into scrubber orders. This is a quite easy saving with a short payback — it would make sense to me,” she told TradeWinds.
