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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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Monday, 30 June 14
INDO - INDIA FREIGHT RATES CONTINUE TO WEAK
COALspot.com: The latest dry Index shows that average all-in spot freight declined, the Panamax and Supramax slipping by 9.11 percent and 4% respec ...
Friday, 27 June 14
DRY BULK MARKET STILL LOOKING FOR UPSIDE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept up its lacklustre performance during the past week, as evidenced by the course of the Baltic Dry Index (BDI). The BDI ...
Thursday, 26 June 14
PANAMAX : A PACIFIC ROUND PAYS AROUND US$ 3K DAILY - FEARNLEYS AS
Handy
In the Atlantic there has been little activity which again has caused rates to slip across all trades. TA´s are now down to US$ 5,500 ...
Thursday, 26 June 14
KOMIPO INVITES BIDS FOR TOTAL 750K MT OF BITUMINOUS COAL FOR 3CY
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) has issued a new tender for supply of total 250,000 MT of bituminous co ...
Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
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- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Economic Council, Georgia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Australian Coal Association
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
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