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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, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low p ...
Tuesday, 08 July 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN IN JULY; LOST 1.62%
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia again revised down the coal bench mark price in July. HBA for month of J ...
Tuesday, 08 July 14
ENERGY IN THE MIX - INTERMODAL SHIPBROKERS
With the Tanker freight market having showed much promise this year compared to the performance that had been noted during the previous five, it is ...
Monday, 07 July 14
INDONESIA STATE-CONTROLLED COAL MINER BUKIT ASAM TO TRADE COAL ON-LINE THROUGH JFX
COALspot.com: Indonesian state owned coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA) has teamed up with Jakarta Futures Exchange (JFX) to sell ...
Monday, 07 July 14
RBCT, THE WORLD'S SINGLE LARGEST EXPORT COAL TERMINAL SHIPPED 31.91 MMT OF COAL IN H1 2014
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the world’s single largest export coal terminal, shipped 31.91 million ton ...
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- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- The University of Queensland
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
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