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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, 18 June 14
CHINESE STEEL PRODUCTION SETS RECORD DURING FIRST TEN DAYS OF JUNE - COMMODORE RESEARCH & CONSULTANCY
Recently released data shows that average daily crude steel production at China's key steel mills hit a record high of 1.833 million tons durin ...
Wednesday, 18 June 14
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Back in January the expectations for Q3 and Q4 were more than great. Talks and claims for a rising BDI and a healthy market were coming from everyw ...
Tuesday, 17 June 14
DRY BULK FREIGHT RATES TO RISE DURING THE SECOND HALF OF 2014, AS CHINA IS EXPECTED TO START IMPORTING MORE IRON ORE FROM BRAZIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its latest analysis of the dry bulk market, BIMCO said that it doesn’t expect freight rates to react significantly to increased demand bef ...
Monday, 16 June 14
INDONESIAN COAL SWAPS FOR Q3 DELIVERY FALL 2.34 % MONTH ON MONTH
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, 16 June 14
API 8 CFR SOUTH CHINA COAL SWAPS FALL CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 4.34 percent month on month and closed at US$ 71.05 per mt a ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
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