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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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Saturday, 18 March 23
HEDGE TO OFFSET LNG VOLATILITY, TRADERS TOLD - BALTIC EXCHANGE
A shift in imports from Asia to Europe led to significant volatility in liquefied natural gas shipping last year, prompting industry experts to urg ...
Friday, 17 March 23
INDONESIAN COAL PRICE REFERENCE UP AROUND 2.17% IN MARCH 2023
COALspot.com: Indonesian Coal Price Reference up around 2.17% in March 2023.
According to the new HBA regulation No. 41.K/MB.0 ...
Saturday, 11 March 23
MARKET INSIGHT - INTERMODAL
Uncertainty over the recovery of Chinese demand, demand destruction in Europe, as well as weather conditions will pivot the LNG market this summer. ...
Wednesday, 08 March 23
INDONESIAN COAL REFERENCE PRICE FORMULA HAS OFFICIALLY CHANGED
Indonesian Minister of Energy and Mineral Resources has officially changed the guideline for determining the benchmark price for the sale of coal c ...
Thursday, 02 March 23
INDIA'S SEABORNE CRUDE OIL IMPORTS IN 2022 INCREASED BY 11.5% YOY - BANCHERO COSTA
2022 has turned out to be a very positive year for crude oil trade, despite the surging oil prices and risks of economic recession, Banchero Costa ...
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- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
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