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The most effective and economically attractive solution for treating oily waste water on vessels and keeping our oceans cleaner

Periodic Reporting for period 1 - oilywatertreat (The most effective and economically attractive solution for treating oily waste water on vessels and keeping our oceans cleaner)

Reporting period: 2018-04-01 to 2018-09-30

Most OWSs of today are ineffective and costly, and shipping industry is faced with a challenge: Regulation stipulates how to deal with oily sludge and bilge water - two main types of OW and shippers incur high onshore disposal costs for OW dampening pressured margins - why owners prefer to extract vast amounts of water from all OW onboard and release cleaned water to sea to unburden onboard storage.

FMT from Faroe Islands develops a unique solution for treating oily water on vessels and ashore. Ambition is to make the most effective and economically attractive OWS on the market. FMT has worked many years on developing OW cleaning systems - resulting Sludge Dewatering Evaporator, SDE.

Most OWS’s only deal with the lightly contaminated fraction of oily water; bilge water from engine room and equipment cleaning. This is easier to handle because of lower oil content. In contrast, more heavily polluted sludge originates from fuel oil and ‘luboil’ separators that regularly purify oils from moisture before use in engine. Hence, onboard storage fills quickly and adds large costs for disposal, equipment and operations. What’s more, illegal disposal is still rife and operators often turn a blind eye. Consequence is polluted waterways posing existential threats to life in ocean and coastal habitats.

Shipowners/regulators indirectly put demands on machine-crewmembers they barely can comply with, as current solutions are not able to full-fill all regulatory requirements. When caught disposing illegally, fines can go into the millions of euros and even be followed by imprisonment. Larges owners and operators have for many years been frustrated by this situation and they have long been searching the market for more effective solutions.

FMT builds the solution to modern day requirements. An early prototype of the new SDE is installed on one of the vessels of the large shipowners and an energy plant ashore. SDE is the only solution that can effectively separate oil and water from all types of sludge or oily water onboard and thereby eliminating in-harbor disposal costs.

All ships are legally required to have equipment to treat bilge water, and it must be tested and type approved according to MEPC 107 (49) . Vessels of 400-10,000 GT shall be fitted with oil filtering equipment complying with Marpol and oil content of effluent must be <15 ppm and the ship has in operation an oil discharge monitoring and control system and oily water separating/filtering equipment, OWS .

Regulations demand untreated sludge stored safely in special tanks until transferred to land. Currently, oil contained in sludge is of no value and only creates disposal costs for operators. Pressure on on-board storage facilities mounts and leads to sludge being released illegally, f.x in so-termed ‘magic pipe’ installations, where the crew deliberately, but illegally, makes it look like the Oil Measuring Device, OMD (ppm monitor) <5 ppm.
FMT has had two prototypes in the market and has researched and studied the performance of these two solutions in operation.

One system is installed ashore on an energy plant in the Faroe Islands, SEV, that is a sole provider of energy for the whole Faroese society of 50.000 people.

The other system has been installed on a Maersk/AP Moeller ship together with another 18 Sludge Dewatering Separators-solutions, whereoff FMT would like to be able to offer to rebuild half of them into the newer system SDE.
Superior performance
This new solution, SDE performs superior to current OWS’s in a record pay-back time. Water resulting from the evaporation and condensation process in the SDE contains less oil than 5 ppm (parts of oil per million parts of water), which is well below the regulatory level of 15 ppm.

The Business Opportunity
OWS’s and storage is a critical part of operations on ships as malhandling can result in high penalties, lost shipping days and high disposal costs. Every ship needs oily water separation and all on-ship engineers understand the value of a more effective system. A pay-back time of under one year is considered very attractive and is opening a major business opportunity for FMT.

Ship segments
The market traction already identified is helped by two market conditions: 1) A handful of large shipowners own the majority of vessels. 2) Many medium sized vessels (>35%) are older than 20 years requiring replacement/retrofit of their OWS system.

No other OWS offers the economics that SDE can
SDE relieves the requirement for the storage tanks on-board the ship by about 40%, expanding the possibility for commercial use of ship space. Calculations are primarily based on the savings shipping companies can obtain by not having to dispose of large amounts of sludge or oily water mixtures.

Varying costs over the world
Costs vary in different parts in world, being most expensive in Australia. Singapore is cheaper. In Europe, some ports incorporate the sludge disposal costs into the port-fee, but shipping companies are still charged an additional fee. Lower or no sludge amounts would give the companies a stronger bargaining position.

Waste oil and off-hire
Also, when disposing of sludge in the harbour, vessel off-hire costs normally occur. This is a cost that a vessel with SDE on board saves. Lastly, the ship owners can further boost the economic calculation by selling the recovered oil, waste oil, that results from the SDE process. The clean water is released into the oceans. 80% of the economic benefit from the use of SDE comes from eliminating disposal of sludge.

FMT believes the SDE will - when fully developed, tested and ready for commercialisation - demand a total staff of 100 people, three years from now.