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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, 12 May 14
DRY BULK MARKET IS STILL STRUGGLING TO FIND FIRM FOOTING
COALspot.com: The freight market continued to be weak and the BDI closed slightly lower at 997 points or fell 1.96 pct week on week. The cape in ...
Friday, 09 May 14
RBCT SHIPPED 5.4 MMT OF COAL IN APRIL
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest coal export terminal in the world, shipped 5.45 million to ...
Friday, 09 May 14
DRY BULK MARKET: BANKRUPTCY TONNAGE UNLEASHED
Drewry’s latest Dry Bulk Forecaster saw freight rates on most routes declined in 2014’s first quarter as the previous quarter’ ...
Friday, 09 May 14
UNITED STATES COAL PRODUCTION SLIGHTLY SLIDES TO 82.4 MMST IN APRIL
COALspot.com – United States the world's second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal i ...
Thursday, 08 May 14
'TRIAL BY MEDIA, TRIAL BY LAW' - A REPORT FROM TRACK 1 OF BIMCO'S ANNUAL CONFERENCE DUBAI 2014
KNOWLEDGE TO ELEVATE
Aiming to bring a very different type of event into their annual conference, BIMCO presented ‘Double Jeopardy &n ...
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- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- McConnell Dowell - Australia
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