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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Australian Coal Association
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- The University of Queensland
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Minerals Council of Australia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- VISA Power Limited - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
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