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