Yara Marine: We had high hopes for scrubbers in 2020, but Covid-19 changed all that

Driven by the impending IMO 2020 sulphur cap, the scrubber market was in the middle of a historic boom  in 2019, with strong prospects expected in 2020.

However, the coronavirus pandemic changed everything for many industries, including the exhaust gas cleaning segment.

“The coronavirus turned our world upside down virtually overnight,” said Ina Reksten, Yara Marine Technologies COO. 

“In 2019 we had a huge ramp-up to deliver on orders.”

However, stakeholders stepped back toward the end of 2019 to see how regulations were going to be enforced and get a feel for fuel availability and price.

Once the situation became clear, they would adjust their plans and proceed with the next steps toward emissions abatement.

That scenario never played out.

“We never got the chance to see how things would have developed before the coronavirus crisis hit. Those that had invested in scrubber technology were happy, but Covid-19 has overshadowed everything since,” Reksten added. “It hit our core customers, so it has hit us.”

“We had high hopes for the scrubber market in 2020, but Covid-19 changed all that,” said Shyam Thapa, Yara Marine Innovation Manager.

“Travel and distancing restrictions made it difficult to do business, and the resulting fall in oil prices weakened the scrubber case substantially.”

When it comes to the outlook for scrubbers, the IMO 2020 and upcoming regulations are bound to play a major role.

Yara Marine believes increased requirements for reporting and monitoring will drive investors’ decisions into the types of scrubbers moving forward.

The company delivers mostly open-loop scrubbers, though they offer both hybrid and closed-loop.

“But right now we have only inline scrubbers, and bypass technologies make up 30 percent of today’s market, so we plan to introduce U-type products in the near future,” Thapa said.

“We are also working on a closed-loop upgrade option if customers want. Interest is down right now for hybrid or closed-loop solutions, but it might pick up again, depending on oil price development.”

Commenting on the lessons learnt from the pandemic, Rekisten said that the company will work on establishing a strong global footprint with regional hubs for service personnel and engineers, as a way of addressing potential travel restrictions in the future.

Nevertheless, the crisis has accelerated the company’s expansion plans beyond scrubbers.

As disclosed, the core priority of the company has switched to the provision of technologies paving the way for a ‘greener marine industry’.

As explained by Reksten, digitalization will play a major role in the process.

“We can use digital technology to help our customers meet environmental requirements. We have access to large amounts of data, but what can we do with it? This is a challenge for us just like for everybody else, but we have a parent company that has made great progress in exploiting data to protect the environment,” she said.

“There is still a significant scrubber market out there, but we want to serve customers on a broader basis. There are so many really good opportunities in green tech for the maritime industry that we want to take advantage of. Our technological development and our future as a company both tie into this strategy,” she pointed out.

Yara Marine is looking into the fuel efficiency optimization as well as the use of ammonia as fuel, technologies behind digital ports and heat recovery from scrubber water.

“There are many companies in the Yara Group, and we are looking into all likely scenarios for exploiting synergies,” Thapa explained.

“In 2019 we were working 100 percent on just scrubbers.”

“Now we can put our minds to other tasks, and invest more in R&D. We are expanding to realize the mission of helping to achieve a greener maritime industry. This means using our knowledge to grow into other areas. We are planning for future generations, and that includes more than scrubbers.”