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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, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...
Wednesday, 13 January 21
COAL TO BE BIGGEST CONTRIBUTOR TO INDIA'S $5 TRILLION ECONOMY: AMIT SHAH - BUSINESS STANDARD
The Centre on Monday awarded the letter of allocation to successful bidders of coal mines under the commercial auction held during October-November ...
Monday, 11 January 21
MUTED COAL RECOVERY IN 2021 - BALTIC EXCHANGE
Coal demand is expected to rebound in 2021
Medium-term outlook is less favourable although demand declines are expected to be subtle ...
Sunday, 10 January 21
KOREAN GENCOS INVITED BIDS FOR TOTAL 880,000 TONS OF COAL FOR MARCH 2021 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), on behalf of EWP, KOSPO, KOSEP and KOWEPO issued an international tender for total 880 ...
Friday, 08 January 21
INDIA COULD COMPETE AGAINST CHINA IN SOLAR MODULE PRODUCTION WITH THE RIGHT GOVERNMENT SUPPORT - IEEFA
The focus should be on helping manufacturers become globally competitive
Although one of the top 10 solar module producers in the world, India ...
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- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- The University of Queensland
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
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