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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, 23 March 14
THE COAL FREIGHT RATES SEEN SLIGHTLY FIRMING UP THIS WEEK - REDDY
COALspot.com: The freight market firmed up this week. BDI was up 8.26 pct week on week and index was closed at 1599 points. The Cape index was u ...
Saturday, 22 March 14
SHIP OWNERS INVEST $15 BILLION FOR NEWBUILDINGS AND SECONDHAND VESSELS DURING FEBRUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have kept on their aggressive stance in the investment scene both for newbuildings, as well as for secondhand vessels globally durin ...
Friday, 21 March 14
DRY BULK MARKET STAYS ON RECOVERY MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has reached new year heighs, as a result of renewed Capesize demand. The Baltic Dry Index (BDI) ended yesterday's sessio ...
Friday, 21 March 14
US COAL PRODUCTION UP 1.5%; WEST MISSISSIPPI COAL PRODUCTION DOWN 1.85% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
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- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
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