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