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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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Sunday, 20 July 14
THE FREIGHT MARKET CONTINUED ITS DOWNWARD TREND
COALspot.com: The market continued its downward trend this week as all segments were down compared to last week. The Cape and Panamax indices being ...
Friday, 18 July 14
3RD CHINA INTERNATIONAL SHALE GAS SUMMIT
Building on the massive success of the past 2 shale gas programs that has generated huge success by attracting 500+ industry players, and intrig ...
Friday, 18 July 14
US WEEKLY COAL PRODUCTION UP BY 1.4% TO 18.3 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 17 July 14
PANAMAX : MARKET HAS COOLED DOWN AGAIN TO LOW AND DEPRESSED LEVELS
Handy
The supra market remains pretty flat in the Atlantic while for the smaller sizes there has been little reported with ships chasing business ...
Thursday, 17 July 14
INDIAN GOVERNMENT WISE TO TAKE ADVANTAGE OF CURRENTLY LOW THERMAL COAL PRICES AND SHIPPING RATES - JEFFREY LANDSBERG
With thermal coal import prices (and also shipping rates) very low at present, India's government would be very wise to take advantage of curre ...
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- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Bhatia International Limited - India
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