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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, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.75 PCT - XINHUA
China Taiyuan coal transaction price index stood at 126.01 points Monday, up 0.75 percent week on week.
The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
Undeclared/excess bunkers can be considered a criminal act by Turkish customs officials with the ship's crew being ac ...
Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
Capesize
This week witnessed the dreaded correction in the Capesize market, with the time charter average shedding almost 18 per cent to close ...
Friday, 10 July 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 ...
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- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- PTC India Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
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