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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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Thursday, 31 July 14
RIO TINTO SELLS MOZAMBIQUE COAL ASSETS FOR US$ 50 MILLION TO INDIA'S ICVL
COALspot.com: Rio Tinto has agreed to sell its Mozambique coal assets for just US$ 50 million to International coal ventures Private limited of Ind ...
Wednesday, 30 July 14
CAPES SEEMED TO BE STRANDED AT THE SAME LEVELS; PANAMAXES MANAGED TO SLIGHTLY REVIVE - INTERMODAL
COALspot.com: The Dry Bulk market took a breath this past week, as both Panamaxes and Supras started to see a small influx of activity, which was j ...
Tuesday, 29 July 14
TOTAL SELLS ITS SOUTH AFRICAN COAL MINING ASSETS TO EXXARO
Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affili ...
Tuesday, 29 July 14
GENCO: DRY BULK SHIPPING VALUATIONS NO LONGER ANCHORED TO DISCOUNTED CASH FLOW METHOD - WEIL
KNOWLEDGE TO ELEVATE
Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bank ...
Tuesday, 29 July 14
SHIP OWNERS' DEMAND OF NEW VESSELS DENTED AS A RESULT OF LOWER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The sharp downward direction of dry bulk freight rates has had a negative impact on investors’ secondhand buying appetite that wait to see th ...
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- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
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