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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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Monday, 30 June 14
INDO - INDIA FREIGHT RATES CONTINUE TO WEAK
COALspot.com: The latest dry Index shows that average all-in spot freight declined, the Panamax and Supramax slipping by 9.11 percent and 4% respec ...
Friday, 27 June 14
DRY BULK MARKET STILL LOOKING FOR UPSIDE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept up its lacklustre performance during the past week, as evidenced by the course of the Baltic Dry Index (BDI). The BDI ...
Thursday, 26 June 14
PANAMAX : A PACIFIC ROUND PAYS AROUND US$ 3K DAILY - FEARNLEYS AS
Handy
In the Atlantic there has been little activity which again has caused rates to slip across all trades. TA´s are now down to US$ 5,500 ...
Thursday, 26 June 14
KOMIPO INVITES BIDS FOR TOTAL 750K MT OF BITUMINOUS COAL FOR 3CY
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) has issued a new tender for supply of total 250,000 MT of bituminous co ...
Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
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- Planning Commission, India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
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