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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
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