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Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
 KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely available, HFO propelled a long period of robust growth in international shipping, which carries over 90% of intercontinental trade by volume each year. For many, it is the lifeblood of the maritime shipping industry.
But HFO’s low price does not reflect its impacts on the environment and human health. The sulfur content of HFO can be up to 35,000 parts per million. It is the reason that maritime shipping accounts for 8% of global emissions of sulfur dioxide (SO2), making the industry an important source for acid rain as well as respiratory diseases. In some populous port cities, such as Hong Kong, shipping is the largest single source of SO2 emissions as well as emissions of particulate matter (PM), which are directly tied to the sulfur content of fuel. By one estimate, PM emissions from maritime shipping led to 87,000 premature deaths worldwide in 2012.
The International Maritime Organization (IMO), the governing body of international shipping, has made a decisive effort to diversify the industry away from HFO into cleaner fuels with less harmful effects on the environment and human health. Effective in 2015, ships operated within the Emission Control Areas (ECAs) covering the Economic Exclusive Zone of North America, the Baltic Sea, the North Sea, and the English Channel will begin to use Marine Gas Oil (MGO) with allowable sulfur content up to 1,000 ppm. Starting from 2020, ships sailing outside ECAs will switch to Marine Diesel Oil (MDO) with permitted sulfur content up to 5,000 ppm.*
That tectonic shift also creates openings for a variety of new fuels. Liquefied nature gas (LNG), newly abundant and relatively affordable, is attracting the attention of many shipping companies. Although the lack of infrastructure and the uncertainty of future prices have slowed the “dash to gas,” many expect LNG to establish itself as one of major alternatives to HFO in the future. Lloyds Registry, a shipping classification society, expects LNG to take 11% of the market share in 2030.
Meanwhile, Stena Teknik, a Swedish company, is testing methanol, another natural gas product, but one that requires less storage space in a ship and is relatively easier to handle. While natural gas-based fuels may sometimes offer questionable climate benefits, due to methane leakage concerns, the IMO’s low-sulfur regulation may create needed openings for other zero-sulfur, low-carbon marine fuels. Tests using fuel cells on the Viking Lady, an offshore supply ship, demonstrated promising results.
Wind kites and solar panels have already been installed on numerous ships to supplement marine diesel engines. Even HFO will not completely disappear from the menu of marine fuels. Combined with scrubbers that capture more than 99% of the sulfur from the exhaust gas, HFO will continue to play an important role. Lloyds Registry reckons that HFO will represent about 40% of fuel use by 2030.
The shift to cleaner but pricier low-sulfur fuels is likely to heighten interest in the “fifth fuel”: energy efficiency. Historically, the maritime shipping industry, where energy often accounts for over half of operating costs, has responded to escalating fuel prices with innovative energy-saving strategies. To cite a recent example: in 2008, as fuel prices went through the roof, shipping lines cut their operating speeds by as much as 50%, helping many companies stay afloat amid one of the worst downturns in history. In an analysis of satellite data on ship operations, we’ve estimated that the industry can further slash 100 million ton of fuel use by 2030 through wider implementation of energy-saving measures that were adopted by industry leaders in 2011.
This is in addition to savings of 90 million tons of fuel because of the Energy Efficiency Design Index (EEDI), a mandatory program that will require new ships to achieve certain efficiency targets beginning in 2015.
The continued diversification of marine fuels and improvements in energy efficiency have important implications. First and foremost, they may alleviate concerns about the availability of low-sulfur fuels. Figure 1 illustrates one possible scenario, using our forecast on future marine fuel consumption and energy efficiency improvements as well as Lloyds Registry’s estimate of market shares for HFO and LNG. The efficiency improvement of the legacy fleet is the greatest force driving down the need for low-sulfur fuels, equivalent to adding about 110 “negatons” of fuel, or almost 24% of projected demand. HFO combined with scrubbers, EEDI, and distillates (MGO plus MDO) are almost neck and neck, each representing about 20% of fuel use in the chart. LNG is coming of age, with its share doubling between 2020 and 2030. Other fuels, such as renewables, fuel cells, and biofuels, are expected to hold only small market shares in 2030.
Second, the new fuels are on a collision course with IMO safety regulations concerning flashpoint, the temperature at which a fuel can vaporize to form an ignitable mixture in air.
The IMO currently requires marine fuels to have a minimum flashpoint of 60°C. But low-sulfur fuels have a lower flashpoint (50° to 55°C), meaning that they are “off-spec” and cannot be used under the IMO rule. The flashpoint requirement, which went into effect in 1976, was meant to provide a large margin of error to ensure the temperature of the engine room (normally below 45°C) does not exceed the flashpoint in any circumstance. But according to industry heavyweights such as Maersk and BIMCO, modern technologies such as advanced ventilation systems provide an adequate safety margin, and they argue that keeping the flashpoint requirement will cause the industry to miss the opportunity represented by the increased availability of low-sulfur, low-flashpoint fuels. Industry and member states such as the U.S. are urging the IMO to accelerate its consideration of an amendment to the flashpoint requirement.
By: Haifeng Wang / The International Council of Clean Transportation
*Implementation of the requirement is subject to a review of fuel availability to be completed by 2016.
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Wednesday, 06 August 14
CAPES: BUSINESS INTEREST REMAINS SOFT; CURRENTLY NO SIGNS OF IMPROVEMENT - INTERMODAL
COALspot.com: Despite the considerable pressure witnessed in the freight market for most of the size segments, the Dry Bulk Index was able to note ...
Wednesday, 06 August 14
SHIPPING MARKET INSIGHT - EVA TZIMA
Recent reports that Indonesia’s ban on exports of metal ore concentrates was lifted for the first time in six months for two of its biggest m ...
Wednesday, 06 August 14
SGX SUCCESSFULLY LAUNCHED NEW SGX COAL PRODUCTS
COALspot.com: Singapore Exchange (‘SGX’) has announced that, the exchange has successfully launched its new Coking and Thermal Coal pro ...
Monday, 04 August 14
ANNUAL SECOND HALF SURGE IN BRAZILIAN IRON ORE EXPORTS ABOUT TO BEGIN - JEFFREY LANDSBERG
COALspot.com: Great strength in the capesize market has all along been set to occur during the second half of this year, as that is when Brazilian ...
Monday, 04 August 14
SUB-BIT FOB INDONESIA COAL SWAP INCHES UP DESPITE LOW DEMAND
COALspot.com: Indonesian coal swaps for average Q4’ 2014 increased US$ 0.15 day on day and US$ 0.13 per mt week on week. But, the swap was lo ...
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- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- The University of Queensland
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
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