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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, 30 September 20
MARKET INSIGHT - INTERMODAL
Spot rates for Capesize bulk carriers received a significant boost last week, however, there are certain reservations in the market regarding the p ...
Tuesday, 29 September 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.73 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.91 points Monday, up 0.73 percent week on week.
The index, released by China ...
Tuesday, 29 September 20
SHIPPING MARKET - ALLIED
Here we are, just a short breath before the final quarter of the year, and many are now debating to what extent we can really expect a firm dry bul ...
Tuesday, 29 September 20
INDONESIAN COAL COMPANIES' EARNINGS TO WEAKEN IN 2H20 - FITCH RATINGS
Rated Indonesian coal miners and contractors will have weaker operating and financial performances in the second half of 2020 than in the first, sa ...
Tuesday, 29 September 20
RUSSIA'S COAL PRODUCTION TO DROP BY 10.5% IN 2020, SAYS MINISTRY - TASS
Russia’s Economic Development Ministry projects a 10.5% decrease in coal production in the country in 2020 compared with last year to 395 mln ...
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- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
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