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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, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low p ...
Tuesday, 08 July 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN IN JULY; LOST 1.62%
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia again revised down the coal bench mark price in July. HBA for month of J ...
Tuesday, 08 July 14
ENERGY IN THE MIX - INTERMODAL SHIPBROKERS
With the Tanker freight market having showed much promise this year compared to the performance that had been noted during the previous five, it is ...
Monday, 07 July 14
INDONESIA STATE-CONTROLLED COAL MINER BUKIT ASAM TO TRADE COAL ON-LINE THROUGH JFX
COALspot.com: Indonesian state owned coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA) has teamed up with Jakarta Futures Exchange (JFX) to sell ...
Monday, 07 July 14
RBCT, THE WORLD'S SINGLE LARGEST EXPORT COAL TERMINAL SHIPPED 31.91 MMT OF COAL IN H1 2014
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the world’s single largest export coal terminal, shipped 31.91 million ton ...
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- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- MS Steel International - UAE
- The University of Queensland
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
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