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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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Friday, 23 May 14
DRY BULK NEWBUILDING CANCELLATIONS COULD HELP SUPPORT MARKET IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's demise over the past few months maybe has come as a surprise to many, but analysts and shipbrokers are looking forward to ...
Thursday, 22 May 14
HEAR SUCCESSFUL CASE STUDIES FROM 10 INDEPENDENT UNCONVENTIONAL GAS OPERATORS
Unconventional Gas Asia 2014 will provide a unique opportunity for Asia’s unconventional gas leaders to share their experience and expertise ...
Thursday, 22 May 14
CNPC-GAZPROM DEAL A MEDIUM - TERM POSITIVE FOR CHINA'S GAS SECTOR
Fitch Ratings says a 30-year deal in which Russia's OAO Gazprom (BBB/Negative) will supply gas to China National Petroleum Corporation (CNPC; A ...
Thursday, 22 May 14
CAPESIZE : RATES ARE STILL UNDER PRESSURE
Handy
A quiet start into the week in Far East, some fresh Indonesian coal order in the market. For trips within S.E. Asia, Supras are trading aro ...
Wednesday, 21 May 14
SHIPPING: MARKET INSIGHT - GEORGE LAZARIDIS
The recent revision by the OECD of its global growth forecast has sparked a debate as to the potential outcome these new figures will have on seabo ...
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- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- The University of Queensland
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Makarim & Taira - Indonesia
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