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No early retirements due to 2020 sulfur cap, Del Rio says

(Photo: Meyer Werft)
The newly delivered Norwegian Bliss is equipped with scrubbers
In advance of 2020's global cap on sulfur emissions from ships, Norwegian Cruise Line Holdings has been retrofitting a portion of its fleet with scrubbers, and newbuilds like Norwegian Bliss are arriving scrubber-equipped.

Under international and US regulations, ships with sulfur-reducing technology can continue to burn less expensive HFO since their scrubbers 'scrub out' sulfur oxides.

HFO/MGO proportions will change

Currently the NCLH fleet uses about 70% HFO and 30% MGO. NCLH interim CFO Mark Kempa said that proportion is expected to flip to about 40% HFO and 60% MGO in 2020. The ships without scrubbers will have to use MGO.

No forced retirements

NCLH president and CEO Frank Del Rio does not anticipate older vessels will be forced into retirement by the stricter International Maritime Organization emissions standards.

The company has 'spent a lot' retrofitting its ships, and they serve premium destinations, which command a higher price point, he said.

'I don't see the price of fuel causing us any kind of accelerated retirement,' Del Rio told analysts during Wednesday's first quarter earnings call.