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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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Sunday, 20 April 14
FREIGHT RATES END WEEK ON WEAK NOTE - VISTAAR
Wish you all Happy Easter.
The freight market continued to its downwards as BDI was fell 7.187 percent to 930 points week on week.
The ...
Friday, 18 April 14
US WEEKLY COAL PRODUCTION DECLINED BY 1% TO 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 17 April 14
DRY BULK MARKET ON RETREAT MODE, WHILE NEWBUILDING ORDERING ACTIVITY STALLS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating this week, a pattern which emerged since late March. Yesterday the BDI (Baltic Dry Index) ended yet a ...
Wednesday, 16 April 14
INDONESIA'S FEBRUARY 2014 COAL EXPORT VOLUME FELL 2.41%
COALspot.com: Indonesia, the world 4th largest coal producer and the global largest multi grade coal exporter shipped around $1.77* billio ...
Wednesday, 16 April 14
Q1 2014 : TERMS OF FREIGHT RATES THE PERFORMANCE IN THE DRY BULK MARKET HAS NOT MET THE HIGH EXPECTATIONS - INTERMODAL
This year the dates for the celebration of Easter will coincide for the Orthodox and the Catholic, so we are already seeing most people in the m ...
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- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- ASAPP Information Group - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
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