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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, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Baramulti Group, Indonesia
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Trasteel International SA, Italy
- VISA Power Limited - India
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Australian Coal Association
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- MS Steel International - UAE
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
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