SCRUBBER SYSTEM MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Scrubber System Market size was valued at US$ 5.45 Bn in 2023 and is expected to reach US$ 8.15 Bn by 2030, growing at a compound annual growth rate (CAGR) of 5.9% from 2023 to 2030.

Scrubber System Market Regional Insights:

• Asia-Pacific is the largest market for scrubber systems, with a market share of over 40%. This is due to the region's rapid industrialization and growing demand for clean air. The Chinese government has implemented strict environmental regulations, which is driving the demand for scrubber systems in the country.
• North America is the second-largest market for scrubber systems, with a market share of over 30%. This is due to the region's strict environmental regulations and the presence of a large number of industrial facilities. The US government has also implemented a number of subsidies and tax breaks to promote the use of scrubber systems.
• Europe is the third-largest market for scrubber systems, with a market share of over 20%. This is due to the region's strong focus on environmental protection and the presence of strict emissions regulations. However, the market is expected to face some challenges, such as the high cost of scrubber systems and the lack of government subsidies.

Figure 1. Global Scrubber System Market Share (%), By Region, 2023

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Analyst Viewpoint

The scrubber system market is expected to experience moderate growth in the coming years. The stringent environmental regulations regarding sulfur emissions from marine vessels are a major driver for the installation of scrubber systems. The IMO regulations capping the sulfur content in marine fuels presents an opportunity for scrubber suppliers as it will increase demand for their systems. However, high capital costs associated with scrubbers pose a challenge to their widespread adoption. The availability of low sulfur fuel alternatives can also restrain scrubber installation to some extent.

The Asia Pacific region, led by China and South Korea, currently dominates the scrubber system market due to presence of large shipbuilding industry and growing maritime trade in the region. However, Europe is projected to witness fastest growth and emerge as the key revenue generator owing to stringent environmental laws and establishment of emission control areas. Within Europe, Norway and Finland are adopting scrubbers at rapid pace. Scrubbers also find increasing application in cruise industry where demand is concentrated in North America and Caribbean regions. Land-based power plants is another end-use sector driving future revenues for suppliers.

In summary, while regulatory push will support growth, high costs can limit scrubber installation. Asia Pacific remains dominant but Europe is rising rapidly. Suppliers must focus on value offerings around performance, reliability and viable financing to overcome restraints and capitalize on the opportunities emerging from IMO regulations.

Scrubber System Market Drivers:

• Stringent Emission Regulations: Emission control regulations by international and regional governing bodies are a major driver for the scrubber system market. The International Maritime Organization (IMO) has set limits on sulfur oxides emissions from ships. Emission Control Areas like the North Sea and Baltic Sea have more stringent sulfur emission limits of 0.1% compared to the global limit of 0.5% imposed from 2020. Such regulations have increased demand for scrubbers as they enable ships to continue using heavy fuel oil while meeting emission standards. For instance, the upcoming China Emission Control Area regulation in 2025 is expected to boost scrubber demand. Growing environmental concerns and health impacts of emissions have led regulatory authorities to impose more emission control policies benefitting the scrubber market.

• Cost Benefits over Low Sulfur Fuels: Scrubber systems enable ships to continue using lower cost heavy fuel oil instead of switching to more expensive low sulfur fuels to meet IMO 2020 emission standards. This provides significant fuel cost savings that help recover the capital expenditure on scrubbers. According to DNV GL, the price differential between low and high sulfur fuels is expected to persist in the long term, providing an economic incentive for scrubber adoption. In addition, the payback period is estimated to be less than two years for newbuild scrubber installations. The cost benefits compared to using compliant fuels will continue to drive scrubber demand.

• Proven Emission Reduction Efficiency: Scrubber systems have demonstrated over 95% removal efficiency for sulfur oxides and particulate matter emissions in marine engines. Emission tests by manufacturers have validated their effectiveness in helping ships meet and surpass emission standards set by regulations. Unlike emissions reduction techniques like exhaust gas recirculation that lead to lower fuel efficiency, scrubbers have negligible impact on engine performance. Their capability to effectively reduce emissions while allowing use of lower cost fuels will continue to drive adoption.

• Retrofit Opportunity in Existing Fleet: The existing global fleet offers a substantial retrofit opportunity for scrubber systems, which is an important demand driver. As of 2022, over 5000 ships have retrofitted or committed to retrofit scrubbers to meet IMO 2020 and ECA regulations. Older ships find it more economical to retrofit scrubbers rather than switch to costlier clean fuels. Compared to newbuilds, the payback period is estimated to be even shorter for retrofits. With 90% of current ships set to still operate in 2030, retrofitting scrubbers on existing non-compliant fleet will drive market growth.

Scrubber System Market Opportunities:

• LNG as Future Marine Fuel: Liquefied natural gas (LNG) is expected to gain wider adoption as a clean marine fuel in the coming years. It meets SOx and PM emission standards set by IMO without after-treatment. Scrubbers provide an opportunity for ships using LNG fuel to reduce NOx emissions and meet more stringent regulations. Manufacturers are developing LNG-powered hybrid scrubber systems optimized for both SOx and NOx removal. Such exhaust cleaning systems for emerging LNG-fueled vessels provide significant opportunities for market growth.

• Digitalization and IoT Integration: Digitalization and IoT technologies are transforming the marine industry. Scrubber manufacturers have the opportunity to integrate digital solutions with their systems for predictive maintenance, real-time monitoring, data analytics and more. For instance, combining AI with emissions monitoring systems can optimize soot blowing and water cleaning to improve efficiency. IoT integration also enables fleet-wide monitoring and supports decision making. Advances in automation, machine learning and cloud platforms provide opportunities to enhance scrubber systems.

• Development of Robust Technologies: While early scrubber systems faced issues like corrosion and unreliable components, advancement in materials, coatings and designs provides opportunities to develop more robust, reliable systems. New technologies like streamlined water cleaning, non-clogging atomizers, vibration resistant components, effective SO2 absorption media address previous shortcomings. Hybrid scrubbers that combine dry and wet systems also overcome limitations of single technology scrubbers. Future opportunities exist to leverage new materials like ceramics and improve component life for uncompromised operations in tough marine environments.

• Compliance with Tighter Emission Standards: With regions like the EU and China setting more stringent NOx and PM emission standards for ships, scrubber systems will require enhancements to help ships achieve higher emission reductions. Manufacturers can develop multi-pollutant scrubbers or integrate with PM reduction technologies like electrostatic precipitators to address tighter future emission regulations. Compliance with upcoming 0.1% global sulfur limit in 2025 also provides opportunities for more efficient, hybrid scrubber technologies. These help expand the scrubber market.

Scrubber System Market Trends:

• Integration of IoT and Digitalization: Integration of automation, IoT sensors, connectivity and data analytics is an emerging technology trend in the scrubber system market. IoT platforms allow real-time monitoring of scrubber operations and performance parameters onboard ships from onshore locations. They generate data to optimize efficiency, minimize downtime through predictive maintenance and ensure sustainable compliance. Remote monitoring also provides fleet-wide scrubber diagnostics. Digital twin modeling helps analyze system functioning. Such technologies are making scrubbers smarter.

• Hybrid and Multi-pollutant Scrubber Systems: Hybrid wet-dry scrubbers that combine advantages of both technologies are gaining popularity. They overcome limitations of single mode scrubbers. Multi-pollutant scrubbers with enhanced PM removal capabilities in addition to SOx are also emerging. These trends are driven by increasingly stringent emission limits. Hybrid systems also allow flexibility to operate in open or closed loop modes. Multi-pollutant scrubbers integrate additions like filters and precipitators. These technology trends provide more efficient solutions.

• Advancements in Membrane-based Scrubbers: Membrane-based scrubbers utilize permeable membranes that selectively allow SO2 to permeate. They overcome drawbacks of conventional scrubbers like high water usage. Recent advancements like incorporating crystallized salt membranes to prevent acid damage and using porous polymers like PTFE have enhanced reliability. Compact membrane module designs also reduce footprint. Low maintenance and capability to produce usable sulfuric acid make this emerging technology suitable for Emission Control Areas.

• Focus on Waste Management: Management of wash water discharge from open loop scrubbers faces environmental concerns. Trends include installing wash water treatment systems for closed loop operations. Hybrid scrubbers allow switching between open and closed loop. Scrubber monitoring systems track pH, polycyclic aromatics and turbidity to ensure regulatory compliance. These trends mitigate environmental issues. Recovering sulfur by-products is also being explored for commercial applications. Such waste management focus addresses sustainability.

Scrubber System Market Restraints:

• High Capital and Operating Costs: The high capital expenditure required to install scrubber systems, especially for retrofits, can deter ship owners. This poses a restraint for market growth. Uncertainty in cost recovery from fuel price arbitrage due to fluctuating price spreads between high and low sulfur fuels also acts as a barrier. Additionally, high costs associated with operation including energy, maintenance, cleaning chemical additives and disposal of wash water waste can restrain smaller vessel segments.

• Reduced Efficiency with Fuel Blends: While scrubbers effectively reduce SOx and PM emissions when using high sulfur heavy fuel oil, their removal efficiency reduces significantly with mixed or blended fuels containing 0.5% sulfur. Ships may have to increasingly use such IMO 2020 compliant fuels. This can diminish the returns on investment into scrubbers and restrain uptake. More research is required to improve efficiencies with blended fuels.
• Installation and Space Constraints: Scrubber installation on existing ships often requires significant modifications including reinforcement of foundations. Retrofits need extensive planning to integrate within space and design limitations. Such constraints are prominent in smaller vessel segments. Requirement for backup systems to ensure redundancy also increases space requirements. Difficulty meeting safety criteria during open sea retrofit installation also restrains adoption.

Recent Developments:

New product launches:

• In March 8, 2023, Shipbuilding company Wärtsilä has secured its first contract for carbon capture and storage-ready scrubbers, known as CCS-Ready scrubbers. These scrubbers are designed to be easily upgraded to a full CCS system in the future, offering shipowners a future-proof solution for complying with stricter emissions regulations. The order involves four 8,200 TEU container vessels under construction at an undisclosed Asian shipyard. These vessels will be equipped with Wärtsilä's 35MW CCS-Ready scrubbers in an open-loop configuration.
• In April, 2022, Shipbuilding Company Wärtsilä has launched the IQ Series scrubber, a major leap forward in exhaust gas treatment technology. This innovative design offers several key advantages:
• In January 2020, Alfa Laval which is a leading global provider of first-rate products in the areas of heat transfer, separation and fluid handling introduces PureSOx Express, a streamlined version of their popular scrubber system, specifically designed for smaller vessels like handymax bulkers and product tankers.
• In May 2020, Shanghai Bluesoul launched the BLR-HP scrubber system with a unique aluminum alloy frame, making it 70% lighter than steel frames. This allows installation on high-speed crafts.

Acquisition and partnerships:

• In April 2022, Wärtsilä partnered with Norwegian companies Solstad and TECO 2030 for developing zero-carbon vessels with fuel cells and carbon capture. This will advance climate goals.
• In February 2021, Alfa Laval acquired StormGeo, a weather intelligence software provider. This enhances Alfa Laval's digital services capabilities in the marine industry.

• In October 2020, Wärtsilä merged with Exilator, a maritime emissions abatement technology company. This helped Wärtsilä strengthen its offering of closed-loop scrubber systems.

Figure 2. Global Scrubber System Market Share (%), by Industry Vertical, 2023

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Top companies in Scrubber System Market:

• Wärtsilä
• Alfa Laval
• Yara Marine Technologies
• Panasia
• HHI Scrubbers
• Puyier
• Clean Marine
• Fuji Electric
• Shanghai Bluesoul
• DowDuPont
• Ecospray
• Belco Technologies
• Croll Reynolds
• Langh Tech
• Valmet
• PureteQ
• SAACKE Group
• ECOSPRAY Technologies
• Royal Caribbean Group
• Carnival Corporation & plc

*Definition: The scrubber system market refers to the industry and market associated with the manufacturing, sales, and installation of exhaust gas cleaning systems for marine vessels. Scrubber systems help capture and remove sulfur oxides, particulate matter, and other pollutants from the exhaust gases of marine engines. The global market has grown rapidly in recent years, driven by upcoming environmental regulations set by the International Maritime Organization to reduce ships' sulfur emissions. Key players operate in the market across the value chain from design, manufacturing, integration and installation of these scrubber systems. The market is further segmented into different technologies such as wet, dry, hybrid, open loop, closed loop, and membrane-based scrubbers. The marine industry is the primary end user. Growth is driven by increasingly stringent policies, regulations, cost benefits, and greater environmental awareness.

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