DEF Supply Expected To Match Increasing Demand As IMO Implementation Approaches

With the gradual move to Tier 4 engines domestically and the international implementation of IMO 2020 just six months away—both emission-reducing regulations—the demand for low sulfur fuel and diesel exhaust fluid (DEF) for selective catalytic reduction (SCR) systems is set to rise.

A panel of fuel and engine representatives from the maritime industry gathered at the recent Inland Marine Expo in St. Louis, Mo., to discuss the history of SCR technology and the DEF supply chain. SCR systems, or “scrubbers,” inject a urea solution into an engine’s exhaust stream. A chemical reaction occurs, converting nitrogen oxide to diatomic nitrogen and water.

Jerry West, product manager for EMD Progress Rail, moderated the panel, which also included Jason Spear, marine product strategy manager for Caterpillar Marine; David Hirt, director of new product development for Cummins’ marine division; Tony Odak, chief operating officer for John W. Stone Oil Distributor; Trace Laborde, marine manager for Mitsubishi engine distributor Laborde Products; and David Reynolds, vice president for Economy Boat Store.

West first pointed out that SCR is far from a new technology.

“It was patented in the United States in 1957 by Engelhard Corporation,” West said.

An alternative to SCR for reducing nitrogen oxide emissions onboard vessels is EGR, or exhaust gas recirculation. However, West said vessel operators ought to look at how the trucking industry wrestled with EGR versus SCR. In that industry, West said, scrubbers won out over EGR. West was confident the same will happen in the maritime industry.

“History repeats itself,” West said.

West said an advantage of SCR over EGR is that scrubbers by comparison are much cleaner for engines.

“One of the reasons all the manufacturers that sit on this panel today went with SCR is because, if you use EGR, it adds very high soot load and a lot of black stuff inside your engine, which lowers maintenance cycles and creates problems for emissions,” West said.

SCR systems are also simple and reliable, West said. And if the system goes down, it’s not engine-disabling, so vessels can remain underway until the system is repaired.

Concerns related to SCR systems have included availability of DEF on the inland waterways and storage of DEF onboard vessels. Looking at the national demand for DEF, the panel saw no reason to suspect a supply shortage. Last year, a whopping 6 billion gallons of DEF was sold in the United States.

“For those of you who think availability might be a problem, well let’s ask the people that took 6 billion gallons of it for use last year,” West said.

For the marine market, DEF is 40 percent urea and 60 percent water. The price of urea is based on natural gas and fertilizer, the two major feed stocks in abundant supply, meaning the price of DEF should be stable for some time.

Odak said John W. Stone has been involved in bulk delivery of DEF for the offshore market. He said, as inland vessels move predominantly to Tier 4 engines with SCR systems incorporated into the engine footprint, the fuel dock and midstream availability of DEF will increase rapidly.

“Everywhere you want it, it will eventually be available,” Odak said. “Where you pick up fuel, you’ll eventually be able to pick up DEF or urea.”

Odak added that operators shouldn’t worry about handling or transferring DEF or the safety of storing DEF.

“The same precautions you would take handling diesel on board, you should take with urea,” he said.

Reynolds said Economy Boat Store, through its partnership with Pilot Thomas Logistics, is prepared to meet growing demand for DEF in the inland market.

“From our standpoint, we’ve not seen the demand build on the inland side of the house,” Reynolds said. “But from a supplier standpoint, we’re here to tell you the availability is there and the supply network exists when and where that time does present itself.”

Reynolds compared it to an Economics 101: when the demand presents itself, the supply will take shape.

A question from the audience arose regarding fuel efficiency of Tier 3 engines versus Tier 4 engines and how scrubber systems fit into Tier 4 engines. Panelists representing engine manufacturers outlined how their engine designs in general incorporate the SCR system into the footprint of the engine, meaning no extra space is required to “add on” the scrubber. And using the 40 percent urea DEF means less space needed for that as well.

Overall, engine representatives said their Tier 4 engine was more fuel efficient than their Tier 3 version, with the resulting fuel savings typically offsetting the added expense for DEF.