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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, 26 May 14
Q3 14 CFR SOUTH CHINA COAL SWAPS LOST 2.24% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.24 percent month on month and closed at US$ 73.88 per mt as on F ...
Monday, 26 May 14
NEWBUILDING ORDERING ACTIVITY RISES BY 78% IN DWT TONNAGE OVER THE FIRST 4 MONTHS OF THE YEARS, AS OWNERS INVEST$40.5 BN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have plunged into newbuilding orders during the first four months of the year, as overall newbuilding business ended for the first four ...
Sunday, 25 May 14
FREIGHT RATES FROM SOUTH KALIMANTAN TO EAST COAST INDIAN PORTS WERE ASSESSED AT $9.50/MT
COALspot.com: The BDI was closed at 964 points down by 6.13 pct week on week. The Cape Index was lost 172 points or 11.24% week on week and closing ...
Saturday, 24 May 14
DRY BULK MARKET'S RECOVERY IS JUST AROUND THE CORNER SAYS SHIPOWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the weaker than expected market sentiment in the dry bulk market over the course of the past few months, analysts and shipowners alike appe ...
Friday, 23 May 14
U.S. WEEKLY COAL PRODUCTION SLIPS 1.8% WEEK ENDED MAY 17, 2014
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
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- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
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