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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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- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Australian Coal Association
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
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