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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, 09 June 14
API 8 CFR SOUTH CHINA COAL SWAP Q3 14 DELIVERIES LOST 4.61% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 4.61 percent month on month and closed at US$ 71.62 per mt a ...
Sunday, 08 June 14
DRY BULK MARKET RATES FOR PANAMXES TO REMAIN VOLATILE; NO IMPROVEMENTS SEEN OVER THE WEEK
COALspot.com: Cape index increase pushes BDI index to 989 points week on week. The BDI firmed up by 5.88 pct and closed at 989 points week ended 6 ...
Saturday, 07 June 14
EVERYTHING CHANGES, AND NOTHING ABIDES - HERACLITUS
A couple of weeks ago, and while everyone was focusing on the struggling freight market, Russia and China made history by signing a three-decade lo ...
Saturday, 07 June 14
FIRST BITE AT ANTI-CORRUPTION CLAUSE - BIMCO
In recent years a number of countries have introduced anti-corruption legislation which, unfortunately, fails to recognise the practical implicatio ...
Saturday, 07 June 14
U.S. MONTHLY COAL PRODUCTION SLIGHTLY HIGHER IN MAY 2014
COALspot.com – United States the world's second largest coal producer, produced approximately 19.2 million short tons (mmst) of coal in a ...
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- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
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- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
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- Coal and Oil Company - UAE
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- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
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- Mintek Dendrill Indonesia
- White Energy Company Limited
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- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
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- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
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- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
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- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
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- Power Finance Corporation Ltd., India
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- PNOC Exploration Corporation - Philippines
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- Meralco Power Generation, Philippines
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- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
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- GVK Power & Infra Limited - India
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- Price Waterhouse Coopers - Russia
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- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
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- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Minerals Council of Australia
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- Kideco Jaya Agung - Indonesia
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- Indian Oil Corporation Limited
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- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
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- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Commonwealth Bank - Australia
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- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
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- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
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- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
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- Goldman Sachs - Singapore
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- Indogreen Group - Indonesia
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- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
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- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
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- Indonesian Coal Mining Association
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- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
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- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
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- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
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- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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