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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.
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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- VISA Power Limited - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
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