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