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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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- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Australian Coal Association
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
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