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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, 02 May 14
DRY BULK MARKET SHOWING SIGNS OF COMEBACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market which has been hovering below the 1,000-point market (BDI) during the past couple of weeks, could be exhibiting signs of a s ...
Thursday, 01 May 14
INDONESIA EXPORT BAN POINTS TO QUESTIONS OVER CHINA'S LONG-TERM BAUXITE SUPPLY - WOOD MACKENZIE
China’s Bauxite demand forecast to reach 240 million tonnes by 2030
In light of the Indonesian mineral ore ban that came into force o ...
Thursday, 01 May 14
DRY BULK MARKET STILL REELING UNDER PRESSURE FROM VARIOUS FACTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's revival is still overdue, as the industry's benchmark, the BDI is still lagging below the 1,000-point mark. In fac ...
Wednesday, 30 April 14
FREIGHT MARKET FOR DRY BULKERS STILL REMAINS WEAK - INTERMODAL
One week after the Easter holiday and the celebration for the resurrection of Christ, everybody expected to see a similar sign of a revival in t ...
Tuesday, 29 April 14
Q4 SUB-BIT INDONESIA COAL SWAP CLOSED US$ 1.07 HIGHER COMPARED TO Q2 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for average Q2’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
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- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Planning Commission, India
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Australian Coal Association
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
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