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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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- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- MS Steel International - UAE
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- The University of Queensland
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
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