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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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Wednesday, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
Wednesday, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
Since last September most thought that the worst was behind us. It looks like the market de ...
Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
Monday, 14 July 14
SGX CFR SOUTH CHINA COAL SWAP FOR Q3' 14 LOST 17.29% SINCE EARLY JANUARY 2014
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. API 8 CFR South China Coal swap for delivery in Q3 drops U ...
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- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Australian Coal Association
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
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