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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, 08 April 14
PORT OF NEWCASTLE SHIPPED 2.90 MMT OF POWER PLANT AND SEMI-SOFT COKING COAL IN A WEEK
COALspot.com: In the week ended 07:00 hours 7 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensla ...
Tuesday, 08 April 14
RBCT SHIPPED 53.79% MORE COAL IN MARCH 2014
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 6.90 million to ...
Tuesday, 08 April 14
APRIL 2014 INDONESIAN COAL PRICE REFERENCE DROPS TO LOWEST SINCE JANUARY 2010
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised down again the coal bench mark price by US$ 2.20 / MT to ...
Tuesday, 08 April 14
TALKING ABOUT A ONE-HORSE RACE - GEORGE LAZARIDIS
Ever since the onslaught of the financial crisis, China along with the other BRIICs, have played a pivotal role in supporting global economic gr ...
Monday, 07 April 14
WEEKLY SUB-BIT FOB INDONESIA COAL SWAP CLAIMS EDGE FALL; TREND NEGATIVE
COALspot.com: Indonesian coal swaps for average Q4’ 2014 lost on month, day and on week according to AsiaClear OTC coal swap's reports ...
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- Power Finance Corporation Ltd., India
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- MS Steel International - UAE
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- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
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- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
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- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
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- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
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- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
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- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
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- Port Waratah Coal Services - Australia
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- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
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- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
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- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
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- Global Business Power Corporation, Philippines
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- Ministry of Transport, Egypt
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- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- The University of Queensland
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- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
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- Chamber of Mines of South Africa
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- International Coal Ventures Pvt Ltd - India
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- Australian Commodity Traders Exchange
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- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
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- The State Trading Corporation of India Ltd
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- Romanian Commodities Exchange
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- Kapuas Tunggal Persada - Indonesia
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- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
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- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
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- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
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- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
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- McConnell Dowell - Australia
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- GVK Power & Infra Limited - India
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- European Bulk Services B.V. - Netherlands
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