Source: snet.com

On May 13, 2016, Weihai Puyi  Environmental Technology Co., Ltd. was officially awarded approval in principle of its marine exhaust gas cleaning system by BV and LR, taking its place among leading EGCS suppliers around the world. BV also signed agreement of strategic partnership with Puyi for future cooperation in green shipping field.

The marine exhaust gas cleaning system of magnesium method, jointly developed by Weihai Puyi and Dalian Maritime University, has been installed on COSCO container vessels “Binghe” and “Lingyunhe” in 2011 and 2014 respectively. While using fuel oil with sulfur content of 3.5%, the system successfully treated the exhaust gas to comply with the strictest 0.1% sulfur limit of IMO.

Background

1.According to IMO research, 65% to 70% of global particulate matters (PM2.5) and sulfur oxides come from vessels. Thus, IMO formulated MARPOL convention to control sulfur emission from vessels. It is determined that the sulfur cap of 0.5% will be enforced globally from 2020.

2.In 2015, China’s total emission of COD was 22.946 million tons, sulfur dioxide 19.74 million tons and nitrogen oxide 20.78 million tons. To achieve a fundamental improvement in environmental quality, the total emissions of sulfur dioxide and nitrogen oxide must be reduced to under million tons. In 2015, average PM10 and PM2.5 levels of 338 cities were 87ug/m3 and 50ug/m3 respectively, while those in developed countries at the same development period were 44ug / m3 and 18-25ug / m3 respectively. To maintain the same level as that of developed countries, China has to reduce its emission level by 50% by 2020.

3.On April 24, 2014, the eighth session of the Standing Committee of the 12th National People's Congress voted to adopt the Amendment to the Environmental Protection Law, which came into force on January 1, 2015. So far, this "basic law" in China's environmental field has been revised for the first time in 25 years. On April 16, 2015, the State Council issued the Action Plan for Prevention and Control of Water Pollution. This is the second environmental protection action plan issued by the State Council after the Action Plan for Prevention and Control of Air Pollution issued in September 2013, as well as the second environmental protection action plan of the new administration. On November 26, 2015, the Ministry of Transport issued the Implementation Plan of Marine Emission Control Areas in Pearl River Delta, Yangtze River Delta and Bohai Sea (Beijing, Tianjin, and Hebei). China is taking the lead in setting up marine emission control areas.

4.Global supply and price of MGO: according to DNV, price of MGO in 2015 is roughly $500 / T to $1500 / T; by 2035, the price will exceed $2000 / T. The demand in 2015 is around 45 to 50 million tons, and it is expected to reach a maximum of 200 to 250 million tons by 2020. In 2015, fuel consumption of former COSCON was about 2.5 million tons, 153,000 tons of which was low sulfur fuel. The usage of fuel oil with sulfur content less than 0.1% reduced sulfur dioxide emission by about 9000 tons, while the cost is increased by about RMB 180 million consequently.

5.At present, the majority of Chinese vessels switch to low sulfur fuel in ECAs to comply with the convention. However, costs will thus increase by retrofitting main engines and pipelines, and the higher price of low sulfur fuel itself. As for vessels using LNG, costs of constructing and retrofitting are relatively high as well. At the same time, the installation of LNG storage tanks will reduce loading space, and LNG feed equipment and other supporting facilities are not mature enough. As a result, scrubber remains the best option for conformity.

6.According to Wan Zheng, a professor at Shanghai Maritime University, China has spent an average of US $150 billion a year on environmental protection since 2013. If we take 0.5% of the funds, we are fully capable of providing 50% subsidy for installation of scrubbers nationwide. With stricter emission standards, the demand for scrubbers will increase dramatically.

Advantages

Puyi EGCS has obvious advantages over similar products in the market. With more compact equipment and a higher level of automation, the system is much easier to handle. And thanks to innovative adoption of the cheaper magnesium-based method, the operating cost is much lower. Moreover, payback period of Puyi scrubber is around 1 year, which is another secure guarantee for customers’ investment.

Market Demand

With the issue of IMO regulation and related Chinese environmental policies, it is estimated that in the next few years, 30% to 40% of vessels around the world will be installed with scrubbers. And the scrubber market will witness an massive boom by the enforcement of 2020 sulfur cap.

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