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Wednesday, 02 September 20
MARKET INSIGHT - INTERMODAL
 The imminent global shift towards eco-friendliness has caused divide among the shipping community because there is no outlined, clear-cut way via which shipowners can start approaching the future IMO targets. In 2018, the Marine Environmental Protection Committee adopted a greenhouse gas (GHG) emissions reduction strategy entailing (among others): reduction of CO2 emissions by at least 40% by 2030 and by at least 50% by 2050, compared to 2008 levels. Earlier this month, the 4th IMO GHG study forecasted that shipping emissions are due to increase by approximately 50% till 2050! This will undoubtedly speed up the need for effective GHG mitigation techniques in the maritime industry. It can be argued that realistic attainment of the IMO 2050 target will likely need to encompass a combination of market-based, technological, logistical and ship finance measures. Propulsion methods such as LNG and ammonia currently offer high yet expensive CO2 mitigation potentials. On the other hand, a bunker levy could offer a directly implementable and R&D cost-free approach towards the IMO targets.
A bunker levy may be implemented by a direct carbon tax or an emission trading scheme (ETS). The latter is less desirable since it can only absorb (40-75)% of emissions captured by a current respective bunker levy. Carbon neutral fuels would set a zero-levy baseline; the levy could be increased with increasing carbon footprint of fuels. This method would require a tax per ton of CO2 ($/CO2) emission equivalent (as an industry benchmark). The three current levy implementation strategies proposed in 2019 by the Technical University of Denmark led by Dr. Harilaos Psaraftis include low, medium and high levy intensity strategies.
A horizontal IMO-imposed levy could be enacted on a gradual basis starting from 2023-24 to account for the current newbuilding orders placed. Current IFO price is at around $280/ton, therefore a carbon levy of $75/ton (even at a [15-25]% initial implementation) would increase fuel costs by approximately [5-7]%. Alternatively, a greater than 70% levy imposition by 2030 could be overly aggressive as it would require the timely development of GHG reduction technologies to avoid the shifting of costs from shipowners to end consumers. This is because total annual costs to the shipping industry would exceed $65 billion (computed based on BP’s Statistical Energy Review & Outlook, 2019). The revenue stream distribution of the carbon levy would have to be carefully allocated by the IMO. Arguably, a significant proportion of the funds would have to be used to finance greener shipbuilding methods (inclusive of R&D required) and end-products (vessels). The policy could also incentivize investment in eco-friendly vessel newbuildings by providing lower carbon taxation rates on vessels with better Energy Efficiency Design Indices (EEDIs).
In conclusion, an industry-wide carbon levy may be an efficient approach towards carbon neutrality in shipping due to its direct implement-ability and cost-effectiveness. Regardless of the method(s) employed, successful and feasible GHG mitigation would need to impact all shipowners fairly; this could be accomplished by accurate assessment of each vessel’s carbon footprint. Achieving the IMO 2050 target will require sound collaboration among regulators, industry players and research and financial institutions which could in turn result in the much anticipated and needed re-designing of the international seaborne landscape.
By Dionysis Kourouniotis
Research & Valuations Department
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Cement Manufacturers Association - India
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