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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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Saturday, 23 January 21
GOVT PLANNING TO OPEN UP COAL MARKETING TO STREAMLINE PROCESS - THE INDIAN EXPRESS
The government is considering opening up coal marketing, Coal Secretary Anil Kumar Jain said on Thursday. Currently, production by Coal India is al ...
Thursday, 21 January 21
LNG MARKET RIDING HIGH, BUT WILL THE GAINS CONTINUE? - DREWRY
The LNG market started 2021 on a high note with Asian spot prices crossing $30 per MMBtu while LNG shipping rates recorded a high $350k per day due ...
Thursday, 21 January 21
CHINA'S SPOT THERMAL COAL PRICES REFRESH RECORD HIGH - MYSTEEL
Despite the moderate rebound in temperatures across most regions of China after late December’s deep-freeze, thermal coal prices in the count ...
Wednesday, 20 January 21
CORONAVIRUS OUTBREAK IN HEBEI HAS LIMITED IMPACT ON CHINA'S STEEL INDUSTRY - FITCH RATINGS
The recent Covid-19 outbreak in the steel producing hub Hebei will not have material impact on China’s steel industry, Fitch Ratings says.
...
Wednesday, 20 January 21
MARKET INSIGHT - INTERMODAL
While 2020 is finally behind us, its negative impacts are still hovering over the shipping market. That being said, it is still too early to even s ...
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- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
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