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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, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
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