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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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Friday, 23 May 14
DRY BULK NEWBUILDING CANCELLATIONS COULD HELP SUPPORT MARKET IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's demise over the past few months maybe has come as a surprise to many, but analysts and shipbrokers are looking forward to ...
Thursday, 22 May 14
HEAR SUCCESSFUL CASE STUDIES FROM 10 INDEPENDENT UNCONVENTIONAL GAS OPERATORS
Unconventional Gas Asia 2014 will provide a unique opportunity for Asia’s unconventional gas leaders to share their experience and expertise ...
Thursday, 22 May 14
CNPC-GAZPROM DEAL A MEDIUM - TERM POSITIVE FOR CHINA'S GAS SECTOR
Fitch Ratings says a 30-year deal in which Russia's OAO Gazprom (BBB/Negative) will supply gas to China National Petroleum Corporation (CNPC; A ...
Thursday, 22 May 14
CAPESIZE : RATES ARE STILL UNDER PRESSURE
Handy
A quiet start into the week in Far East, some fresh Indonesian coal order in the market. For trips within S.E. Asia, Supras are trading aro ...
Wednesday, 21 May 14
SHIPPING: MARKET INSIGHT - GEORGE LAZARIDIS
The recent revision by the OECD of its global growth forecast has sparked a debate as to the potential outcome these new figures will have on seabo ...
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- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
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