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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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- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
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- Goldman Sachs - Singapore
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- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
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- Ministry of Mines - Canada
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- Merrill Lynch Commodities Europe
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- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
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- Bayan Resources Tbk. - Indonesia
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- Sree Jayajothi Cements Limited - India
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- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
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- Romanian Commodities Exchange
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- IEA Clean Coal Centre - UK
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- The University of Queensland
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- MS Steel International - UAE
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- Mjunction Services Limited - India
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- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
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- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
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- Medco Energi Mining Internasional
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- Tamil Nadu electricity Board
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- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Petron Corporation, Philippines
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- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
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- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
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- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
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- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
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- Kepco SPC Power Corporation, Philippines
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- Cigading International Bulk Terminal - Indonesia
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- GAC Shipping (India) Pvt Ltd
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- White Energy Company Limited
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- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
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- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
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- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
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- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
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- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
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- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
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- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
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- Australian Coal Association
- Chamber of Mines of South Africa
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- ICICI Bank Limited - India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
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