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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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Tuesday, 17 November 20
AUSTRALIAN COAL EXPORTS TO CHINA SLUMP, BUT PRICES ARE MIXED - REUTERS
China’s unofficial ban on coal imports from Australia is starting to take its toll on volumes, with departing cargoes down sharply so far in ...
Friday, 13 November 20
SHIPPING OUTLOOK TURNS STABLE ON EBITDA GROWTH, IMPROVING SUPPLY-DEMAND BALANCE - MOODY’S
Outlook revised to stable from negative.
The global shipping industry is on course to perform better overall than we had previously ex ...
Friday, 13 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Monday, 09 November 20
INDONESIA MAY CUT BIODIESEL USE TARGET AS SUBSIDY FUND DEPLETES - FITCH
The Indonesian government may rein in its push to increase use of biodiesel as it now comes at higher cost following a fall in crude oil prices and ...
Monday, 09 November 20
SOUTH AFRICA: COAL MARKET CONDITIONS HAVE ' DETERIORATED MATERIALLY' - IEEFA
The Asian seaborne thermal coal pool is drying out
Resource Generation Ltd’s proposed but long delayed Boikarabelo coal mine i ...
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- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Planning Commission, India
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
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