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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Australian Coal Association
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- The University of Queensland
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
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