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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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Monday, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
Monday, 08 January 24
SEABORNE TRADE REACHES 12.4BN TONNES - CLARKSONS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Monday, 08 January 24
CAPESIZES START THE NEW YEAR ON POSITIVE NOTE - BALTIC EXCHANGE
Capesize
This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and N ...
Friday, 05 January 24
MORGAN STANLEY SEES LOWER OIL PRICES IN 2024 ON OVERSUPPLY CONCERNS - REUTERS
Morgan Stanley sees Brent crude prices anchored near $80 per barrel in the first half in 2024 before declining towards the end of the year as it ex ...
Friday, 05 January 24
INDIA'S COAL OUTPUT RISES NEARLY 11 PC IN DEC TO 92.87 MT - PTI
India’s coal production increased by 10.75 per cent to 92.87 million tonne in December 2023 as compared to the year-ago period, an official s ...
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- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
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