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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, 12 May 14
DRY BULK MARKET IS STILL STRUGGLING TO FIND FIRM FOOTING
COALspot.com: The freight market continued to be weak and the BDI closed slightly lower at 997 points or fell 1.96 pct week on week. The cape in ...
Friday, 09 May 14
RBCT SHIPPED 5.4 MMT OF COAL IN APRIL
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest coal export terminal in the world, shipped 5.45 million to ...
Friday, 09 May 14
DRY BULK MARKET: BANKRUPTCY TONNAGE UNLEASHED
Drewry’s latest Dry Bulk Forecaster saw freight rates on most routes declined in 2014’s first quarter as the previous quarter’ ...
Friday, 09 May 14
UNITED STATES COAL PRODUCTION SLIGHTLY SLIDES TO 82.4 MMST IN APRIL
COALspot.com – United States the world's second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal i ...
Thursday, 08 May 14
'TRIAL BY MEDIA, TRIAL BY LAW' - A REPORT FROM TRACK 1 OF BIMCO'S ANNUAL CONFERENCE DUBAI 2014
KNOWLEDGE TO ELEVATE
Aiming to bring a very different type of event into their annual conference, BIMCO presented ‘Double Jeopardy &n ...
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- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
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- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
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- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
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- Georgia Ports Authority, United States
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
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- Timah Investasi Mineral - Indoneisa
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- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
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- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Minerals Council of Australia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
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- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
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- Trasteel International SA, Italy
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- IHS Mccloskey Coal Group - USA
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