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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, 02 July 14
HANDY BULKERS PROVE TO BE THE MOST SOUGHT AFTER VESSELS OVER THE PAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The Handy dry bulker proved to be the most sought after ship by ship owners active in the second hand market, which saw a slight decline in terms o ...
Wednesday, 02 July 14
SHIPPING: MARKET INSIGHT - GEORGE DERMATIS
After 6 months, 57 ministerial meetings and 67 political agreements, the journey of the Greek Presidency in the EU reached its end yesterday; only ...
Tuesday, 01 July 14
INDIAN POWER PLANT COAL STOCKPILES VERY LOW
COALspot.com: According to today's Weekly Dry Bulk Report published by Commodore Research, Indian power plant coal stockpiles have now fallen t ...
Monday, 30 June 14
SUB-BIT FOB INDONESIA COAL PRICES ARE STILL STRUGGLING TO RECOVER
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
Monday, 30 June 14
WEEKLY CFR SOUTH CHINA COAL SWAPS DECLINE CONTINUES; Q1'15 LOST US$ 4.55 PMT IN A WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in Q3 fell US$ 5.25 month on month on Friday, dipping under $69 a tone. The CFR South Ch ...
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- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Parliament of New Zealand
- Indogreen Group - Indonesia
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- McConnell Dowell - Australia
- PTC India Limited - India
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
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