Not enough low-sulfur fuel oil is available to replace the fuels used by marine shippers ahead of a fast-approaching regulation, according to analysis by Wood Mackenzie.
An rule imposed by the International Maritime Organization will limit the amount of sulfur allowable in fuels used by marine shippers. The goal is to reduce sulfur emissions, which cause acid rain. The regulation is set to take effect in less than one year, but analysts at Wood Mackenzie, an energy research and consultancy firm, forecast that there is not enough of the low-sulfur fuel available to replace the dirtier fuels.
By separate estimates, the shipping industry needs to replace up to 3 million barrels per day of marine fuel. The global supply of ultra-low-sulfur fuel, however is estimated to increase to 1.4 million barrels per day in 2020 and to 1.7 million barrels per day in 2024, Wood Mackenzie analysts said.
In 2017, refineries capable of supplying the shipping market produced about 1 million barrels per day of the less than 0.5% sulfur fuel oil, the regulatory cutoff. Refineries, particularly on the Gulf Coast, stand to gain from the regulation because they are capable of processing very dirty crude into fuel that will meet emissions will be in high demand.
Many of those complex refineries are located in the United States and on the Gulf. Refineries could see their profit margins for diesel jump 35% in 2020 due to the rule, according to the U.S. Energy Department.
Since demand for heavier crudes will drop as the shipping industry makes the switch, lighter and sweeter crudes will rise in value, analysts write. This is good news for Texas, which producers lighter grades of crude in the Permian Basin of West Texas and other shale plays.
Lighter crudes are likely to rise in value on the regulation. Booming production in the United States is likely to reduce the supply strain on the global market for lighter grades, analysts write.
As demand for low-sulfur fuel oil jumps, shippers are preparing to take other measures to comply, such as converting their fuel use to liquefied natural gas or equipping ships with scrubbers, a technology that cleans dirty fuel aboard the ship.
Use of LNG for shipping will rise due to the regulation, analysts write, jumping up 70% between 2019 and 2020. However, this will only displace less than 100,000 barrels per day of marine fuels in 2020.
So far, shippers have confirmed more than 2,000 orders for scrubbers, technology that cleans high-sulfur fuel on the ship to meet standards. Wood Mackenzie sees orders for scrubbers steadily increasing each year, exceeding 4,000 by 2025. Analysts anticipate that just more than 10% of the world’s fleet will have scrubbers installed by 2020.
Wood Mackenzie anticipates 85% of the world’s fleet to be in compliance with the regulation in 2020 and predicts full compliance to be achieved by 2025.
http://pointgl.com/wp-content/uploads/2016/03/POINT_GL_LOGO.png00Point Global Logisticshttp://pointgl.com/wp-content/uploads/2016/03/POINT_GL_LOGO.pngPoint Global Logistics2019-02-19 16:26:322019-02-19 16:26:32Analyst Says Fuel Supply Inadequate for Ocean Shippers to Comply With New Rule
Kyunghee Park and Jason Clenfield | Bloomberg News| Transport Topics
January 18, 2019 11:30 AM, EST
Shipping containers sit stacked on the Kota Cabar cargo ship arriving at the Port of Oakland in July 2018. (David Paul Morris/Bloomberg)
Air pollution from cars and factories has been regulated in much of the world since the 1970s. When it comes to the smoke-belching ships that carry global trade, the rules have been a lot looser.
Big changes start next January, though, when long-debated standards from the International Maritime Organization mandate steep cuts of sulfur emissions associated with respiratory disease and acid rain. Much tougher rules are supposed to take effect in 2050, when the IMO will require ships also reduce carbon dioxide emissions by at least half.
By itself, next year’s cap could prevent 150,000 premature deaths and millions of childhood asthma cases each year, according to research published in the journal Nature. It will also cost tens of billions of dollars for an industry that has dragged its feet on the environment.
Necessity being the mother of invention, some of the world’s most conservative companies are starting to experiment with cleaner fuels and cutting-edge technologies. Here some of the brave, new ideas in green shipping:
1. Sails!
A.P. Moller-Maersk A/S is considering using a modern version of the old-fashioned sail to help power its ships. The devices, which are being tested on one of Maersk’s giant tankers, look more like huge marble columns than anything you’d expect to see on a traditional yacht. Together, the two 10-story-tall cylinders can harness enough wind to replace 20% of the ship’s fossil fuels, according to Norsepower Oy Ltd., which makes them.
Eco Marine Power, a startup based in Japan, has designed another sail — this one with solar panels in its body. Chief Technology Officer Greg Atkinson says the firm is in talks with one of the world’s biggest shippers to test the device this year.
2. Underbelly Bubbles
Just as carmakers fine-tune the aerodynamics of their vehicles to get better gas mileage, shipbuilders also try to reduce the friction between a vessel’s body and the water. Optimizing hull shape is one strategy. Another, being tried by firms including Samsung Heavy Industries Co. and Mitsubishi Heavy Industries, is streaming bubbles out of tiny holes in a ship’s underbelly, as a lubricant, to help it slice more cleanly through the water. It’s a little like floating on a carpet of air.
Samsung says it’s already installing the system on one vessel being built for Mediterranean Shipping Co. and has received two other orders. The tech can cut fuel consumption by 4% or 5%, according to the company.
3. Robot Cleaners
Since the earliest days of sea voyages, sailors have been troubled by grasses, barnacles and other organisms that grow on hulls. All the biggest cargo lines are now using submarine robots to strip away such debris and improve fuel efficiency.
One device, developed by a Japanese startup called Hullbot, looks like a propeller-powered go-kart with nylon brushes and a vacuum on its belly. Thrusters on its back keep it pinned to the vessel’s hull. No divers are needed, but the machine still requires a human operator to guide it by remote control.
4. Hydrogen Fuel
The world’s biggest shipbuilder, Hyundai Heavy Industries Co., last year announced it’s developing hydrogen-fueled engines for its massive vessels. The tech is in its infancy, but some proof of concept may come later this year when a small ship being billed as the first fuel-cell passenger ferry, the Water-Go-Round, begins operating on San Francisco Bay. Hydrogen-based ferry systems are also planned in Norway and Scotland’s remote Orkney islands.
5. Battery Boats
The challenges faced by electric cars, with their limited driving ranges, are even more daunting when it comes to oceangoing ships, which can weigh 600,000 tons and must often travel thousands of miles. Shipbuilders are experimenting with smaller river vessels and other craft that stay near shore.
In Norway, where the government wants two-thirds of all ferries carrying passengers and cars along its Atlantic coast to be electrified by 2030, Kongsberg Gruppen ASA is offering battery-powered ship engines and developing a shorthaul electric container vessel.
A Chinese-built ship launched in 2017 on the Pearl River, near Hong Kong, was the first fully-electric cargo carrier of any size, according to the China State Shipbuilding Corp. The vessel is emissions-free, but even with batteries sufficient to power three dozen Tesla sedans, the 2,000-ton ship can only travel about 50 miles without recharging, says the China News Service.
6. Exhaust Scrubbers
Within the next few years, some 10% to 15% of ships are projected to install scrubber systems, like the ones used on factory chimneys, to capture sulfur and fine particulate emissions before they escape exhaust funnels.
Makers of the devices, such as Finland’s Wartsila OYJ and Sweden’s Alfa Laval AB, say there’s already a big backlog of orders, so many ships won’t be outfitted in time for the 2020 rule change. Bloomberg NEF estimates some 4,800 vessels will be scrubber-equipped by 2025.
7. Fossil Fuel Switch
The most immediate — and consequential — change is the most mundane: switching to lighter marine gas oil, which is something closer to the diesel used for highway trucks. It’s still a fossil fuel, but less polluting because it’s been more thoroughly refined.
Marine gas oil is already used in Emission Control Areas, like the ones around Europe’s coasts, but using it full time in order to meet the new emissions rules will cost shipping companies an extra $40 billion to $60 billion annually, according to Goldman Sachs Group Inc. and researcher Wood Mackenzie.
Liquefied natural gas is another option, but the cleaner fuel requires whole new engines and port facilities to store it. In 2016, Nippon Yusen KK launched the world’s first LNG-powered car carrier and last October a Russian super tanker the length of several football fields crossed the Baltic Sea, running on the condensed gas.
http://pointgl.com/wp-content/uploads/2016/03/POINT_GL_LOGO.png00Point Global Logisticshttp://pointgl.com/wp-content/uploads/2016/03/POINT_GL_LOGO.pngPoint Global Logistics2019-02-11 13:38:352019-02-11 13:39:08Seven Ways the Ocean Cargo Industry Is Pursuing Green Shipping
http://pointgl.com/wp-content/uploads/2016/03/POINT_GL_LOGO.png00Point Global Logisticshttp://pointgl.com/wp-content/uploads/2016/03/POINT_GL_LOGO.pngPoint Global Logistics2019-02-04 14:07:472019-02-04 14:07:47The World's Busiest Ports
Analyst Says Fuel Supply Inadequate for Ocean Shippers to Comply With New Rule
/0 Comments/in Uncategorized /by Point Global LogisticsNot enough low-sulfur fuel oil is available to replace the fuels used by marine shippers ahead of a fast-approaching regulation, according to analysis by Wood Mackenzie.
An rule imposed by the International Maritime Organization will limit the amount of sulfur allowable in fuels used by marine shippers. The goal is to reduce sulfur emissions, which cause acid rain. The regulation is set to take effect in less than one year, but analysts at Wood Mackenzie, an energy research and consultancy firm, forecast that there is not enough of the low-sulfur fuel available to replace the dirtier fuels.
By separate estimates, the shipping industry needs to replace up to 3 million barrels per day of marine fuel. The global supply of ultra-low-sulfur fuel, however is estimated to increase to 1.4 million barrels per day in 2020 and to 1.7 million barrels per day in 2024, Wood Mackenzie analysts said.
In 2017, refineries capable of supplying the shipping market produced about 1 million barrels per day of the less than 0.5% sulfur fuel oil, the regulatory cutoff. Refineries, particularly on the Gulf Coast, stand to gain from the regulation because they are capable of processing very dirty crude into fuel that will meet emissions will be in high demand.
Many of those complex refineries are located in the United States and on the Gulf. Refineries could see their profit margins for diesel jump 35% in 2020 due to the rule, according to the U.S. Energy Department.
Since demand for heavier crudes will drop as the shipping industry makes the switch, lighter and sweeter crudes will rise in value, analysts write. This is good news for Texas, which producers lighter grades of crude in the Permian Basin of West Texas and other shale plays.
Lighter crudes are likely to rise in value on the regulation. Booming production in the United States is likely to reduce the supply strain on the global market for lighter grades, analysts write.
As demand for low-sulfur fuel oil jumps, shippers are preparing to take other measures to comply, such as converting their fuel use to liquefied natural gas or equipping ships with scrubbers, a technology that cleans dirty fuel aboard the ship.
Use of LNG for shipping will rise due to the regulation, analysts write, jumping up 70% between 2019 and 2020. However, this will only displace less than 100,000 barrels per day of marine fuels in 2020.
So far, shippers have confirmed more than 2,000 orders for scrubbers, technology that cleans high-sulfur fuel on the ship to meet standards. Wood Mackenzie sees orders for scrubbers steadily increasing each year, exceeding 4,000 by 2025. Analysts anticipate that just more than 10% of the world’s fleet will have scrubbers installed by 2020.
Wood Mackenzie anticipates 85% of the world’s fleet to be in compliance with the regulation in 2020 and predicts full compliance to be achieved by 2025.
Seven Ways the Ocean Cargo Industry Is Pursuing Green Shipping
/0 Comments/in Uncategorized /by Point Global LogisticsAir pollution from cars and factories has been regulated in much of the world since the 1970s. When it comes to the smoke-belching ships that carry global trade, the rules have been a lot looser.
Big changes start next January, though, when long-debated standards from the International Maritime Organization mandate steep cuts of sulfur emissions associated with respiratory disease and acid rain. Much tougher rules are supposed to take effect in 2050, when the IMO will require ships also reduce carbon dioxide emissions by at least half.
By itself, next year’s cap could prevent 150,000 premature deaths and millions of childhood asthma cases each year, according to research published in the journal Nature. It will also cost tens of billions of dollars for an industry that has dragged its feet on the environment.
Necessity being the mother of invention, some of the world’s most conservative companies are starting to experiment with cleaner fuels and cutting-edge technologies. Here some of the brave, new ideas in green shipping:
1. Sails!
A.P. Moller-Maersk A/S is considering using a modern version of the old-fashioned sail to help power its ships. The devices, which are being tested on one of Maersk’s giant tankers, look more like huge marble columns than anything you’d expect to see on a traditional yacht. Together, the two 10-story-tall cylinders can harness enough wind to replace 20% of the ship’s fossil fuels, according to Norsepower Oy Ltd., which makes them.
Eco Marine Power, a startup based in Japan, has designed another sail — this one with solar panels in its body. Chief Technology Officer Greg Atkinson says the firm is in talks with one of the world’s biggest shippers to test the device this year.
2. Underbelly Bubbles
Just as carmakers fine-tune the aerodynamics of their vehicles to get better gas mileage, shipbuilders also try to reduce the friction between a vessel’s body and the water. Optimizing hull shape is one strategy. Another, being tried by firms including Samsung Heavy Industries Co. and Mitsubishi Heavy Industries, is streaming bubbles out of tiny holes in a ship’s underbelly, as a lubricant, to help it slice more cleanly through the water. It’s a little like floating on a carpet of air.
Samsung says it’s already installing the system on one vessel being built for Mediterranean Shipping Co. and has received two other orders. The tech can cut fuel consumption by 4% or 5%, according to the company.
3. Robot Cleaners
Since the earliest days of sea voyages, sailors have been troubled by grasses, barnacles and other organisms that grow on hulls. All the biggest cargo lines are now using submarine robots to strip away such debris and improve fuel efficiency.
One device, developed by a Japanese startup called Hullbot, looks like a propeller-powered go-kart with nylon brushes and a vacuum on its belly. Thrusters on its back keep it pinned to the vessel’s hull. No divers are needed, but the machine still requires a human operator to guide it by remote control.
4. Hydrogen Fuel
The world’s biggest shipbuilder, Hyundai Heavy Industries Co., last year announced it’s developing hydrogen-fueled engines for its massive vessels. The tech is in its infancy, but some proof of concept may come later this year when a small ship being billed as the first fuel-cell passenger ferry, the Water-Go-Round, begins operating on San Francisco Bay. Hydrogen-based ferry systems are also planned in Norway and Scotland’s remote Orkney islands.
5. Battery Boats
The challenges faced by electric cars, with their limited driving ranges, are even more daunting when it comes to oceangoing ships, which can weigh 600,000 tons and must often travel thousands of miles. Shipbuilders are experimenting with smaller river vessels and other craft that stay near shore.
In Norway, where the government wants two-thirds of all ferries carrying passengers and cars along its Atlantic coast to be electrified by 2030, Kongsberg Gruppen ASA is offering battery-powered ship engines and developing a shorthaul electric container vessel.
A Chinese-built ship launched in 2017 on the Pearl River, near Hong Kong, was the first fully-electric cargo carrier of any size, according to the China State Shipbuilding Corp. The vessel is emissions-free, but even with batteries sufficient to power three dozen Tesla sedans, the 2,000-ton ship can only travel about 50 miles without recharging, says the China News Service.
6. Exhaust Scrubbers
Within the next few years, some 10% to 15% of ships are projected to install scrubber systems, like the ones used on factory chimneys, to capture sulfur and fine particulate emissions before they escape exhaust funnels.
Makers of the devices, such as Finland’s Wartsila OYJ and Sweden’s Alfa Laval AB, say there’s already a big backlog of orders, so many ships won’t be outfitted in time for the 2020 rule change. Bloomberg NEF estimates some 4,800 vessels will be scrubber-equipped by 2025.
7. Fossil Fuel Switch
The most immediate — and consequential — change is the most mundane: switching to lighter marine gas oil, which is something closer to the diesel used for highway trucks. It’s still a fossil fuel, but less polluting because it’s been more thoroughly refined.
Marine gas oil is already used in Emission Control Areas, like the ones around Europe’s coasts, but using it full time in order to meet the new emissions rules will cost shipping companies an extra $40 billion to $60 billion annually, according to Goldman Sachs Group Inc. and researcher Wood Mackenzie.
Liquefied natural gas is another option, but the cleaner fuel requires whole new engines and port facilities to store it. In 2016, Nippon Yusen KK launched the world’s first LNG-powered car carrier and last October a Russian super tanker the length of several football fields crossed the Baltic Sea, running on the condensed gas.
The World’s Busiest Ports
/0 Comments/in Uncategorized /by Point Global Logistics