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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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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Planning Commission, India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- The University of Queensland
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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