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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, 23 June 14
COAL SWAPS DROPS FURTHER MONTH ON MONTH ON WEAK DEMAND
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 6.91 percent month on month and closed at US$ 69.00 per mt a ...
Sunday, 22 June 14
THE PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA SLIPPED THIS WEEK
COALspot.com: The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, fell slightly on Friday ...
Friday, 20 June 14
DRY BULK MARKET LOOKING FOR UPSIDE ON ROBUST SEABORNE IRON ORE TRADE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn’t been able to justify the heightened expectations this year. Yesterday, the Baltic Dry Index managed to inch forwar ...
Friday, 20 June 14
US WEEKLY COAL PRODUCTION DROPS 1.8% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
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- White Energy Company Limited
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
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- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
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- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
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- Eastern Coal Council - USA
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- Economic Council, Georgia
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- Metalloyd Limited - United Kingdom
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- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
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- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
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- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
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- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- The Treasury - Australian Government
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- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
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- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
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- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
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- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
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- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
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- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
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- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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- PNOC Exploration Corporation - Philippines
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- Global Business Power Corporation, Philippines
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- Energy Development Corp, Philippines
- MS Steel International - UAE
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
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- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
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- Rio Tinto Coal - Australia
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- New Zealand Coal & Carbon
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- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
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