Analysis on the application prospect of EGCS on ocean-going ships

On January 1, 2020, the IMO global sulphur limit came into effect.As an equivalent approach approved by the IMO, exhaust gas cleaning systems (EGCS) are of concern to shipowners because they allow ships to continue to consume high Sulphur fuel oil (HSFO), which is cheaper than low sulphur fuel oil (LSFO) in most cases.However, the sharp drop in international oil prices in 2020 has greatly narrowed the spread between prices of HSFO and LSFO, raising doubts about the economics of EGCS.Many countries and regions have introduced regulations banning open loop scrubber wash water, and the potential IMO market-based measures to reduce greenhouse gas (GHG) emissions have also increased the uncertainty of the application prospect of EGCS.Based on the above understanding, this paper comprehensively considers various factors affecting the application of EGCS currently, to evaluate the economics of EGCS in the retrofit market and newbuilding ship market under the background of high and low fuel price level, and finds the economic response law of EGCS to fuel price fluctuations.Taking the carbon tax policy of 50 $/tCO2 as an example, the economic impact of possible market-based GHG emission reduction measures on the application of EGCS in the future has been also evaluated.EGCS has a strong overall adaptability to fuel prices fluctuations.When the oil price is high, the EGCS has a short payback period, forming an advantage over LSFO ships; when the oil price is low, the net present value of EGCS ships is the highest, forming a suppression of LNG ships.With the continuous increase of GHG emission iv reduction efforts in the future, the application of EGCS will face challenges, but there are still uncertainties.Ultimately, when EGCS will withdraw from the market depends on when mature commercial zero-carbon fuel technologies can be delivered.