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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, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
Wednesday, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
Since last September most thought that the worst was behind us. It looks like the market de ...
Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
Monday, 14 July 14
SGX CFR SOUTH CHINA COAL SWAP FOR Q3' 14 LOST 17.29% SINCE EARLY JANUARY 2014
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. API 8 CFR South China Coal swap for delivery in Q3 drops U ...
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- Wood Mackenzie - Singapore
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
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