MARCH 6, 2015 — Wärtsilä and Clean Marine Energy (Europe) Ltd (CME) have signed a collaboration agreement that they say will provide a convenient funding solution to drive the adoption of exhaust gas cleaning technology.
The financing solution will enable a shipowner to repay the cost of the scrubber system installation via a "fuel adder," i.e. a fuel premium on the price of HFO that can be passed be passed on to charterers and provides a return from the differential between Heavy Fuel Oil (HFO) and Marine Gasoil (MGO) for a period of four to six years, depending on price spreads. This means that shipowners do not have the burden of meeting the up-front capital expenditure, which is typically between $3 million and $12 million per vessel. This investment is often difficult to pass on to charterers, whereas with CME financing, the fuel adder charge can be passed on until such time as the scrubber system is paid for.
Juha Kytölä, Vice President, Wärtsilä Environmental Solutions said: "This funding concept enables ship owners to increase the value of their asset without taking on additional debt, thereby making it easier to achieve long-term compliance with increasingly stringent environmental legislation. Wärtsilä is proud to be at the forefront of developing innovative solutions aimed at assisting customers to reduce both their operational costs and their environmental footprint. This collaboration agreement with CME is one more example of this philosophy."
Pace Ralli, Co-founder and Director of CME (Europe) commented: "The shipping industry is faced with a number of environmental regulations right now, often with a significant capital burden. Despite lower fuel costs, there is an even greater spread between HFO and MGO; as much as 90% in some cases. This allows us to inject capital to pay for the installation of a scrubber, allow the shipowner some of the benefits of continuing to burn HFO and still take out a return. In addition, the asset value improves, while the shipowner is compliant with new tighter ECA regulations. We see the CME solution as filling a gap in the financing of the latest scrubber technology. CME and Wärtsilä can provide the financed installation and maintenance of a scrubber through CME's Emissions Compliance Service Agreement (ECSA)."