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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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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Economic Council, Georgia
- SMC Global Power, Philippines
- The University of Queensland
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
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