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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, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Minerals Council of Australia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
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