Readers of this blog will recall the Alfa Laval launch on their “PureBallast” water treatment system for marine vessels way back in 2007. The IMO international convention for the ‘control and management of ship’s ballast water and sediments’ was the legislation that would drive the adoption of such systems world-wide: at last this convention became legally binding on shipping and ship-owners worldwide on 8th September 2016. Inevitably there is a 12 month time lag before it will be legally enforced, and then, hopefully, tankers will not be allowed to ply their trade without having an approved ballast water treatment system fitted.
Ballast water treatment market
Peter Leifland, current president of the Marine & Diesel Division of Alfa Laval presented some interesting views of this market in support of the recent Alfa Laval Capital markets Day presentation to analysts and stockbrokers.
Leifland commented that “With the ratification in place, the market for retrofit installations is expected to start to move.” Alfa Laval expects that 35 000 ships will install a ballast water treatment system between 2017 and 2025. This is split between 15 000 newly built ships and 20 000 retrofit installations. The average order value per ship for the Alfa Laval chemical-free solution is EUR 200,000 – 225,000.
The Alfa Laval system fully complies with IMO standards and requirements, but as ever different countries can impose further approval and performance requirements and testing, effectively policing their own waters so that only ships with their approved systems can trade in their waters. This means more approval testing, fees, and even design changes for suppliers like Alfa Laval. They have their PureBallast system nearing completion of the long testing procedure needed by the US Coast Guard to check that it meets with their USCG criteria.
Shipboard sulphur oxide emissions (SOx)
The IMO convention for the reduction of sulphur oxides (SOx) emissions from ships has been ratified and since 2015 it has been implemented in some Emission Control Areas (ECAs). This IMO regulation will become global by 2020, requiring that that emission levels will be cut to 0.5%.
Leifland commented that “Alfa Laval estimates that 5 000 ships, new as well as existing, will install a scrubber solution in the period 2017-2025.” Given the continuing development of new solutions, Alfa Laval’s average order value per ship is expected to be EUR 1 million. Leifland sees these two developing markets as a useful opportunity, during a period where “falling ship contracting is impacting our order intake”.