Container line the Mediterranean Shipping Company, or MSC has secured financing to install emissions-cleaning scrubber equipment on board 86 of its ships, according to a law firm involved in the deal.
The shipping company is set to borrow $439 million from a syndicate of four different banks to install the systems, law firm Watson Farley & Williams said Friday. The lawyers advised BNP Paribas, which acted as coordinating bank and agent for the deal.
Scrubber equipment cleans a vessel’s exhaust, allowing it to comply with tightening emissions regulations without having to buy cleaner, more expensive fuels. The International Maritime Organization’s global marine fuels sulfur limit is set to fall from 3.5% to 0.5% at the start of 2020, forcing most ship operators to stop using high sulfur fuel oil.
MSC’s decision to install the equipment on 86 of its vessels — out of a total of 510 across its cargo division — is likely to provide a significant boost to fuel oil demand at the ports its vessels visit from 2020. Container lines operate some of the largest ships in the world, and are the biggest consumers of bunker fuel.
S&P Global Platts Analytics forecasts a total of 2,200 ships will be fitted with scrubbers by the start of 2020.
In a statement in December, MSC said it expects its costs to be more than $2 billion/year higher as a result of its efforts to comply with the new IMO regulation.
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