Marine SOx Scrubber System Market

Market Overview

The global marine SOxscrubber system market is expected to grow at a steady pace after observing substantial growth prior to the implementation of the IMO 2020 regulation, which made scrubbers the leading choice of ship owners instead of compliant fuels.

Emission Regulations to Drive Market Growth

IMO 2020 is the most disruptive event in the shipping industry and a significant driving factor for the global marine SOx scrubber market. Vessel emissions, including those related to sulphur, are governed by MARPOL (International Convention for the Prevention of Pollution from Ships) Annex VI. When inhaled, sulphurdioxide can adversely affect human health, causing respiratory problems and lung diseases. If present in the atmosphere, it canlead to acid rain, which harms crops, aquatic species, and forests and contributes to the acidification of the oceans.

To curtailSOx emission, the IMO (International Maritime Organization) reduced the limit ofsulphurin fuel to 0.5% m/m (mass/mass) from January 1, 2020. Stringent regulations targeting emission control are reshaping the shipping industry as ship owners, and operators are finding ways to comply with IMO regulations. The figure below depicts the emission trends of sulphuroxides in the European Union.

Figure 1: Reductions in Permitted SOx Emissions, 2008–2020

Source: International Maritime Organization (IMO)

Out of the limited viable options available for shipowners, scrubber installation is gaining traction due to its cost and convenience. Replacing the current bunker fuel is an expensive process, and low sulphurfuels are costlier, requiring the installation of new fuel-systems, which makes scrubbers the ideal choice. The industry has favored exhaust gas cleaning system installation, which enables ships to operate on the less expensive HSFO without compromising on legislations. Furthermore, amendments in other marine regulations for fuel oil consumption and CO₂ emissions are expected to bolster market growth during the forecast period.

Growing Shipping Industry and Increasing E-Commerce Activities

Developing countries are observing growth in the e-commerce space, strongly backed by rising disposable incomes and the availability of a broad range of products and services. Globally, the online expenditure of consumers is growing at a rapid pace, which is translating into higher demand for goods. Online marketing and the strong presence of shopping platforms are significant drivers for the shipping industry. Consumers are exposed to many online platforms that enable them to purchase products that can be shipped easily from international markets.

Figure 2 : Prominent Ports by Volume, 2014–2018 (TEU)

Source: World Shipping Council

The higher number of e-commerce transactions around the globe are stimulating cross-continental trade deals. Regional trade agreements, such as NAFTA, EU, ASEAN, and others, positively impact the trade balance of the members. In 2018, the value of merchandise exports of ASEAN increased by 10.5% to reach USD 1450.8 billion, and its imports reached USD 1453.9 billion, marking an increase of 15.5% (data published by the United Nations in their International Trade Statistics Yearbook 2018).

The shipping industry plays an integral part in the global economy and moves more than 80% of world trade by volume. Not only is it a popular method of world trade, but it also emits lower amounts of greenhouse gases compared to other modes. The exponential rise in regional trade and the shipping industry are creating demand for marine SOx scrubbers.

Market Dynamics

HSFO Availability May Affect Future Decisions

The 0.5% sulphurcap on marine fuels implemented by the new IMO regulation 2020has led ship owners to search for alternative fuels. After the implementation of the regulation, the demand for LSFO is expected to rise, especially in the engines of newly constructed ships. To accommodate the rising demand for LSFO, refineries will reduce their production of high sulphurfuel oil and look to low sulphurfuel oil, and this production shift trend will create a shortage in the supply of HSFO.

Currently, there are around 700 refineries producing HSFO, and the Bunker Exchange forecasts that at the beginning of 2020, at least around 200 refineries could announce a possible stop in the production of HSFO until the market settles. As a result, there has been a 50% drop in the number of ports offering HSFO from December 2019 to February 2020.

As the global bunker market adapts to changing market scenarios, it is estimated that the current situation has led to a decline in the HSFO inventories globally. HFSO sales in Rotterdam were down from around 1,941,000 cbm to 1,693,000 cbm in October last year, and the same process was observed in many key Asian ports, such as Shanghai, Hong Kong, and South Korea. A limited supply of HSFO, in the future, may create difficulties for ships equipped with scrubbers, thus affecting the market growth.

Segmental Analysis

Marine Artificial Intelligence to Drive Market Growth

Key contributors in the global marine SOx market are significantly investing in R&D and striving to attain a competitive edge over others. Artificial intelligence is accelerating development in almost every industry, and the prominent shipping industry is no exception. Companies are developing open-loop, hybrid-loop, and hybrid system scrubbers by deploying advanced control systems that are based on marine artificial intelligence, which help ship operators in reducing operating expenses.

The use of scrubbers requires constant maintenance and higher energy consumption onboard, which makes it an expensive investment for shippers. Companies are installing scrubbers with advanced and adaptive control software, thereby optimizing operational costs. The use of scrubbers with the latest technology enables ship owners to focus on maintenance and data analysis to ensure continuous operation. For instance, KameliaCleantech introduced the KCS 1000, a unique scrubber control software that is based on marine artificial intelligence, which helps vessel owners reduce alkali usage up to 30% in a closed-loop scrubber and predictive maintenance.

Marine SOx Scrubber System Market Segmentation

By Type

• Open Loop
• Closed Loop
• Hybrid
• Dry Loop

By Ship Type

• Passenger and Cruise Ship
• Cargo Ship
• Bulk Carrier
• Tanker
• Others

By Region

North America

• The U.S.
• Canada
• Mexico

Europe

• Germany
• The U.K.
• Spain
• France
• Italy
• Russia
• Portugal
• Poland
• The Rest of Europe

Asia-Pacific

• Japan
• China
• India
• South Korea
• Australia
• Vietnam
• Indonesia
• Malaysia
• Singapore
• The Rest of Asia-Pacific

Central and South America and the Caribbean

• Argentina
• Brazil
• Colombia
• The Rest of Central and South America and the Caribbean

The Middle East

• Saudi Arabia
• Oman
• Bahrain
• The UAE
• The Rest of ME

Africa

• Nigeria
• Tanzania
• South Africa
• Ghana
• The Rest of Africa