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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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Wednesday, 27 January 21
MARKET INSIGHT - INTERMODAL
As we have entered the era off renewable energies, all industries globally give max effort to minimize their carbon footprint and consequently thei ...
Monday, 25 January 21
ULTRAMAX YET ANOTHER POSITIVE WEEK FOR THE SECTOR, WHICH SAW INCREASED DEMAND ACROSS ALL BASINS - BALTIC BRIEFING
Capesize
The Capesize market rocked and rolled these past few days. But by weeks end little had changed on the Capesize 5TC as it settled down ...
Monday, 25 January 21
NEW LAW IN CALIFORNIA, USA, AFFECTING SHIPOWNERS' LIABILITY FOR OIL POLLUTION - BIMCO
Members are advised that amendments to the so-called Lempert-Keene-Seastrand Oil Spill Prevention and Response Act of 1990 in the State of Californ ...
Monday, 25 January 21
COAL INDIA SAYS GEARED UP TO MEET SURGE IN FUEL DEMAND FROM POWER SECTOR - PTI
State-owned Coal India Ltd on Saturday said that it is well geared to meet any surge in demand for coal from the power sector.
The s ...
Sunday, 24 January 21
GOVT ASSURES COAL INDIA OF 'FULL SUPPORT', STRESSES ON LEARNING 'NEW THINGS' - PTI
Coal Minister Pralhad Joshi assured Coal India of full government support, even as he said the PSU needs to learn “new things” for impr ...
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- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- The University of Queensland
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
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