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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, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
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