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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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Sunday, 18 May 14
FREIGHT RATES ARE EXPECTED TO BE FIRM NEXT WEEK
COALspot.com: The freight market was steady with the BDI was closed slightly higher at 1027 points or up 3.00 pct week on week.
The Cape ...
Friday, 16 May 14
KOMIPO IS LOOKING FOR 60K MT OF LOW VOLATILE BITUMINOUS COAL
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 60,000 Metric Tons (MT) of low volatile bitumi ...
Friday, 16 May 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 15 May 14
PANAMAX : SHORT PERIOD UP TO ONE YEAR REPORTED IN THE 12.000-12.500 RANGE - FEARNRESEARCH
Handy
The Supra and handy market seems to be affected by the recent holidays in Singapore which still relatively quiet. There are some Indo / ...
Thursday, 15 May 14
USA COAL CONFERENCE
Press Release: IHS Inc. (NYSE: IHS), the leading global source of information and analysis, will host the Coal USA Conference, June 18-20, 2014, ...
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- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
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- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
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- Straits Asia Resources Limited - Singapore
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- Ministry of Finance - Indonesia
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- Pipit Mutiara Jaya. PT, Indonesia
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- Eastern Coal Council - USA
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- Wilmar Investment Holdings
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- Jindal Steel & Power Ltd - India
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- Trasteel International SA, Italy
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
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- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
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- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
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- Commonwealth Bank - Australia
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- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
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- Ministry of Transport, Egypt
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- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
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- Edison Trading Spa - Italy
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- Petron Corporation, Philippines
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- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
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- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
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- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Attock Cement Pakistan Limited
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- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
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- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
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- Altura Mining Limited, Indonesia
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- Romanian Commodities Exchange
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- Bangladesh Power Developement Board
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