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