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Star Bulk’s scrubber investment pays back in 2.5 yearsStar Bulk’s scrubber investment pays back in 2.5 years

Nasdaq-listed Star Bulk Carriers recouped its $250m investment on scrubbers in just two and a half years.

Marcus Hand, Editor

August 8, 2022

2 Min Read
First Chinese built shipboard scrubber(2) hoisting of the scrubber
Photo: Liberian Registry

Exhaust gas cleaning systems, or scrubbers, allow ships to continue using high sulphur fuel oil (HFO) with the global regulation for 0.5% low sulphur under the IMO 2020 regulation.

“We are pleased to report that as of the end of June, we have earned back our $250 million scrubber investment, within a span of 2.5 years,” commented Petro Pappas, CEO of Star Bulk, in the company’s half year results announcement.

The dry bulk shipowner has fitted scrubbers to 94% of its fleet of 128 bulk carriers ranging from 52,000 dwt to 210,000 dwt. The payback on the $250m investment over 2.5 years includes offhire for drydocking of the vessels to install scrubber systems and all related capital expenditures. Looking ahead Pappas said: "these scrubbers should augment our profitability for the foreseeable future".

The surge in the oil price this year has benefitted owners who installed scrubbers with the spread between the price of HFO and very low sulphur fuel oil (VLSFO), the main fuel of choice to comply with IMO 2020, growing significantly.

The current spread between HFO (IFO 380) and VLFSO varies quite significantly depending at which port a ship is refueling at from around $150 per tonne to over $400 tonne. Prices from Ship & Bunker for major bunkering hubs for VLSFO and HFO show the biggest saving at Fujairah and the lowest in Houston.

Related:Scrubber demand surges on $400 plus bunker price spread

Port                             VLSFO per tonne       IFO380 per tonne

Singapore                    $742.50                       $500.50

Rotterdam                   $699.00                       $482.50

Fujairah                       $896.00                       $479.00

Houston                      $762.50                       $611.00

US  shippingstock analysts estimate that savings in the range of $4,000 to $6,000 per day for a scrubber fitted Supramax bulker.

The installation of scrubbers has not been without controversy, in particular open loop systems, where waste water is discharged into the sea, and a number of countries around the world have banned their use in national waters. An interactive map from the Exhaust Gas Cleaning Systems Association (EGSCA) provides an over of regulations in different parts of the world here.

 

About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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