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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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Tuesday, 20 May 14
NEWCASTLE'S COAL EXPORT VOLUME UP 39.11 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 19 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
Tuesday, 20 May 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with sl ...
Tuesday, 20 May 14
DRY BULK MARKET IS BOUND FOR A RECOVERY CLAIMS PARAGON SHIPPING'S HEAD MICHAEL BODOUROGLOU
The dry bulk market is bound for a recovery in the coming weeks, as the market will be better balanced, said Mr. Michael Bodouroglou, Chairman and ...
Monday, 19 May 14
INDO COAL SWAPS FOR AVERAGE Q3' 2014 DELIVERY LOST ON WEEK AND ON MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
Monday, 19 May 14
API 8 CFR SOUTH CHINA COAL LOST 2.49% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.49 percent month on month and closed at US$ 74.35 per mt as on F ...
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- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- PTC India Limited - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Planning Commission, India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- MS Steel International - UAE
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- White Energy Company Limited
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
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