Scorpio Bulkers COO voices scrubber 'scepticism' once again

Scrubber legislation, existing technology and the availability of fuels in 2020 all 'stand in the way' of long-term decision making, says Mackey.

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Updated on 08 Feb 2018 12:13 GMT

The chief operating officer (COO) of dry bulk vessel owner/operator Scorpio Bulkers Inc, Cameron Mackey, has once again voiced his company's scepticism regarding current regulations for exhaust gas scrubbers and existing technology.

Speaking during the firm's last earnings call, Mackey explained that he believed it was just a question of time before scrubber standards are addressed again - potentially resulting in additional costs for companies with the technology already installed.

"It is ironic... that decarbonization can be left up to a ship that is out of sight and out of the reach of many regulators. So, in other words, I think it is only a matter of time before these regulators revisit the scrubber solution and realize that a scrubber takes emissions and instead of putting them into the air, actually puts them into the sea," Mackey said.

"So, we have a healthy scepticism that regulations, as they are now, will not be changed or modified, and that's one of the greatest risks that any ship owner - not just us - has in undertaking an expensive capital project... It's the risk that regulations change, either in implementation or around the technology," the Scorpio Bulkers COO added.

Discussing the design of existing scrubbers, Mackey appeared to suggest that there was concern amongst ship owners about whether the technology "is actually adequately designed and resilient".

"There are tales and case studies of those who have installed scrubbers already in the cruise industry - and some [in] the short sea shipping industry - that indicate that this technology, even as it is currently, may not be adequate to address the objectives that the regulators are putting out there," Mackey explained.

Mackey concluded that "these risks are so great that it would be really foolhardy to undertake that type of investment now".

Mackey added that the aforementioned factors, in addition to uncertainty regarding the availability of fuels in 2020, as well as pricing, were all factors that "stand in the way" of long-term decision making.

However, the Scorpio Bulkers director stressed that the company was "in a privileged position" compared to other ship owners due to the fuel efficiency of its fleet.

As Bunker Index previously reported, Mackey has voiced his concerns regarding scrubber technology before. In April 2017, he said the company believed it was "only a matter of time" before it becomes a legal requirement to use closed-loop scrubbers - where exhaust gases are washed and harmful substances collected in a tank, rather than being discharged into the sea.

Financial results

In its financial results for 2017, Scorpio Bulkers posted a net loss of $59.7 million compared to a net loss of $124.8 million the previous year.

For the fourth quarter (Q4), a net loss of $1.1 million was recorded, which was an improvement on the net loss of $20.6 million in Q4 2016.