Global shipping fleet installing scrubbers to comply with low-sulfur rules

HOUSTON -- BP expects more than 90% of the world’s shipping fleet will comply with new rules that will reduce the amount of sulfur emissions that ships worldwide are allowed to burn to 0.5% from 3.5% starting 2020, a company executive says.

Jason Breslaw, who leads BP’s distillate trading origination across the Americas, says the company expects only ~9% of the industry will be non-compliant; the compliance level has important implications for demand for high-sulfur fuel oil, and BP’s estimates fall well short of other analyst estimates of ~30% non-compliance.

One way ships can comply with coming standards is to retrofit vessels with scrubbers, which can reduce sulfur emissions even if ships continue to burn dirty fuel, but Anil Rajguru, VP of process safety at Fluor, notes the cost of installing scrubbers is $3M-$10M.

“Right now less than 500 ships have scrubbers. We’re talking more like 50,000 and it could take more than a decade before scrubbers are fitted on [all] the vessels,” Rajguru says. Source: Carl Surran, Seeking Alpha