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Wednesday, 12 October 16
UK SEABORNE COAL IMPORT PLUNGES 64% AS A WORRYING TREND LURKS - BIMCO
 The main exporters of thermal coal for coal- fired power plants to the United Kingdom (UK) have experienced a heavy decline in seaborne cargo volumes in 2016. This comes as a result of the UK starting a concerning trend for the dry bulk shipping industry, by close to doubling its Carbon Price Floor (CPF).
Russia, Colombia and the United States (US) have been the top coal exporters to the UK for the previous three years. The long hauls from the US and Colombia have historically been strong routes for the dry bulk industry, as they have provided a lot of tonnage miles. Since the UK increased their CPF to £18 per tonne of CO2, the exports from the three main exporters during the first 7 months have declined 69% compared to last year and the UK total import of coal for coal- fired power plants is down 64% for the same period.
Peter Sand Chief Shipping Analyst at BIMCO comments: “This is one of the most significant effects, which has impacted the demand side of the global dry bulk shipping industry in 2016. It reflects something bigger lurking beneath the surface of the coal industry and in transportation of this commodity.
The declining trend in coal consumption in the UK is affecting the dry bulk industry negatively and this story will not be the only one”.
UK carbon price floor increases coal price by 138%
When the CPF first came into effect in April 2013, it was based on the carbon price support (CPS) price per tonne of CO2 on top of the EU emission trading system (ETS) rate per tonne of CO2. At that time the CPS was £0.819 per Gigajoule (GJ). The introduction of this led to closures of several coal plants from 2012-2014 in the UK, with a total capacity of 8.4 Gigawatt (GW), enough to generate electricity for an estimated 6.7 million homes (Total: 25 million homes).
From the beginning of 2016 the CPS was increased to £1.568 per GJ equalling to around £18 per tonne of CO2, operating on top of the EU ETS at €5 per tonne of CO2. In September 2016 this was equivalent to a tax around £63.90 on a tonne coal worth £46.38 (CIF ARA). This increase led to a further closure of 8.2 GW in 2015 and 2016.
The CPF will double again in 2020 to £30 per tonne of CO2 and by 2030 it will be £70 per tonne of CO2.
Peter Sand adds:” Implementing a tax which increased the total price of coal by 138 %, caused an immediate reaction from the UK coal-fired power plants. The dry bulk industry is hugely affected by this, due to a large reduction in long haul thermal coal imports.”
The capacity taken out as a result of closures has put the UK into a position where their domestically produced supply of electricity will struggle to meet peaks in demand. In the case of domestically produced electricity falling short of demand, the UK will need to rely on importing electricity from other European countries.
Depending on the other European countries energy mix, their electricity exports will be a surplus of renewable fossil fuel – or nuclear energy. If the electricity generated comes from fossil fuel it may offset the declining UK coal imports somewhat and the change in demand for the dry bulk shipping industry will be less severe.
Price floor does the trading scheme’s job
While the effect of the UK carbon price floor to coal imports is undeniable, the European Union emission trading scheme (ETS) has not limited coal imports to the same extent. The development of the European ETS rate per tonne of CO2 from €30 in 2008 to the current €5, has not incentivised others to reduce coal consumption on a large scale. The decrease of the EU ETS rate is primarily due to an oversupply in allowances.
K coal consumption has been falling for four years, while the development in EU coal consumption has been more stable. The increase of the CPF level in 2016, caused a decline of 56.7% year-on-year for the first five months of 2016. A total of 6,839 thousand tonnes was consumed in the first five months, compared to 15,800 thousand tonnes in the year before.
Peter Sand comments: “It will be a setback for the dry bulk shipping industry if the CPF becomes a standardised scheme and is adopted by other nations as well as on a supranational level. It will, if introduced at the same level as in the UK, cause a similar development and closure of coal-fired power plants.
France, importing the fourth largest share of coal for European countries (8%) in 2016, has already imposed a CPF on 30€ per tonne of CO2 planned to be introduced in January 2017”.
Source: BIMCO
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Friday, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Planning Commission, India
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Marubeni Corporation - India
- Petron Corporation, Philippines
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