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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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Friday, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- The University of Queensland
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
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