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