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© 2019. NYK Group. All rights reserved.© 2019. NYK Group. All rights reserved.
Bringing Value to Life- Action for ZERO Emission -
25th Feb 2020
NYK Line
Green Business Group
Senior General Manager
Toshi Nakamura
Japan-Norway Hydrogen Seminar 2020
© 2019. NYK Group. All rights reserved.
Who is NYK Group? Key Figure - Fleet & Facility -
Container ships95
Capesize bulkers110
Panamax bulkers88
Handysize bulkers163
Wood chip carriers42
Car carriers119
Tankers65
LNG carriers 29
Multi-purpose carriers42
Vessel Air Freighter
aircrafts8flights8,095 in 2017
755
*For the year ended March 31, 2018
Terminal
ports51Operating at
in 2018
Logistics Center
locations567m22.65million
*As of March 31, 2018
vessels
*from Factbook
Japan-Norway Hydrogen Seminar (25th Feb 2020) 2
© 2019. NYK Group. All rights reserved.
Mid Term Strategy from 2018 to 2022
Staying Ahead 2022 with Digitalization and Green
Nippon Yusen Kabushiki Kaisha
Green Business Group was established on April 2019.New group aims to implement Green initiatives for driving future growth and value creation.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 3
Hydrogen Offshore wind power LNG marine fuel supply
World’s first LNG bunkering vessel Japan’s first LNG bunkering vessel
World’s first LNG-fueled car carrier
© 2019. NYK Group. All rights reserved.
Business strategy of Hydrogen
Aiming to participate in Hydrogen supply chain.
• Our target scope will be not only ocean transportation but also other parts of the chain. (e.g. production, supply etc.)
• Key issue is “How NYK can create demand for hydrogen”.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 4
Renewableenergy
Production& Storage
Transportation In-land logistics Supply to vesselsConsume
as marine fuel
Hydrogen supply chain
© 2019. NYK Group. All rights reserved.
CHAPTER
© 2019 NYK Group. All rights reserved.
NYK Zero-emission initiatives
2
5
© 2019. NYK Group. All rights reserved.
IMO: International Maritime Organization
• United Nations specialized organization• Established in 1958 in London • 174 countries (as of September 2019)
Vision Zero emissions as early as possible in this century
Target(vs 2008)
Fuel efficiency (ton-mile basis) GHG emissions
40% improvement
by 2030
70% Improvement(effort) by
2050
HalvedBy 2050
Early zero emissions
Mid-term measures
Agreed to 2030
Introduction of economic incentive methodIntroduction of low-carbon alternative fuel
Long-term measures
Agreed to 2060Introduction of zero-carbon alternative fuel
Japan-Norway Hydrogen Seminar (25th Feb 2020) 6
© 2019. NYK Group. All rights reserved.
NYK Super Eco Ship 2050: ZERO-emission
Powered by hydrogen fuel cells
NYK’s action ①: built & operate “Zero-emission vessels”
NYK Super Eco Ship 2050
Shifting to alternative fuels to achieve our GHG reduction target
CO2Reduction
100%
67% reduction in energy from fuel*• Hull remodeling• Hull weight reduction• Energy conservation
*Compared with a 2014-built vessel
Japan-Norway Hydrogen Seminar (25th Feb 2020) 7
© 2019. NYK Group. All rights reserved.
LNG Fuel as a Bridging Solution
NYK’s action ②: introduce LNG fuel for “low-carbon” shipping
• World’s first LNG-fueled car carrier delivered to United European Car Carriers (50% owned by NYK) in 2016
➢ LNG-fueled oceangoing ship
➢ LNG bunkering business
• Japan’s first LNG supply by “truck to ship” in 2015• World’s first LNG bunkering vessel in Zeebrugge in
2017• Japan’s first LNG bunkering vessel to start operation
in 2020
Based on our experience of LNG bunkering, problems to solve to introduce an alternative fuel are 1. Price of the fuel2. Supply chain3. Capital investment (propulsion engine)
Japan-Norway Hydrogen Seminar (25th Feb 2020) 8
© 2019. NYK Group. All rights reserved.
CHAPTER
© 2019 NYK Group. All rights reserved.
Green ammonia fuel for deep sea
3
9
© 2019. NYK Group. All rights reserved.
➢ Approval in Principle(AiP) for the design of Ammonia-Fueled 180,000 ton bulk carrier & Ultra-Large Container Ship (23,000TEU )
Design of Ammonia-fueled vessels
Lloyd’s Register has granted AiP to Chinese Ship yard and MAN for a 23,000 TEU ULCSconcept design (Dec 03, 2019) and a 180,000 DWT bulk carrier(Dec 10, 2019).
Entering “Design phase” for building Ammonia-fueled vessels.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 10
MAN、Samsung(Shipyard)、Lloyd’s Register and MISKstarted FS project jointly from Jan 2020. As their plan, signing ship building contract on 2022 and delivery on 2024.
➢ Joint develop project for Ammonia-Fueled Oil Tanker
© 2019. NYK Group. All rights reserved.
Technical challenges for achieving Zero-Emissions
1. Minimize pilot fuels➢ Co-Combustion with pilot fuels for the flame retardancy of
ammonia.➢ What kind of fuels will be used for pilot fuels ? ➢ How much pilot fuels will be needed ?
2. NOx reduction➢ More effective Selective Catalytic Reduction (SCR) for NOx
reduction to achieve IMO regulations (Tier3).➢ N2O(nitrous oxide) reduction also be a one of issue to be solved.
3. Develop ammonia fueled generator➢ Not only main-engine but also generator to be developed for
ammonia fuel.
Following 3 points are the challenges for achieving Zero-emissions of ammonia fueled vessels.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 11
© 2019. NYK Group. All rights reserved.
Commercial challenges for ammonia fuel
Fuel cost
Japan-Norway Hydrogen Seminar (25th Feb 2020) 12
Fuel storage Supply chain Safety
4 challenges for feasibility of ammonia fueled vessels.
FUEL
© 2019. NYK Group. All rights reserved.
Challenge 1 : Fuel cost
4 challenges for feasibility of ammonia fueled vessels.
Fuel cost Fuel storage Supply chain Safety
2020 2030
Total price Delivered price Carbon Tax
VLSFO 529 910 674 236
AMMONIA 355 422 (target) 422 0
Ammonia target price (USD/ton, delivered price at Singapore)
*VLSFO: Very Low Sulphur Fuel Oil*VLSFO total price =NYK estimated price + bunkering cost + carbon tax cost*Carbon Tax = USD75/ton(IMF recommendation) x 3.151*Above target price was calculated based on Japan-North America 30days round voyage case.
Nearly $420/ton (including delivery cost) can be as economical as heavy oil in 2030.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 13
© 2019. NYK Group. All rights reserved.
Challenge 2: Fuel storage
4 challenges for feasibility of ammonia fueled vessels.
Fuel cost Fuel storage Supply chain Safety
Heat Values
(MJ/m3)Compare with
VLSFO
VLSFO 36.00 1.00
LNG 21.00 1.71
NH3 12.57 2.86 LNG Fueled bulker vessel (Apr 2023 delivery)
LNG Fuel Tank
➢ Minimize impact on
1. cargo capacity2. shipbuilding prices3. operation profiles
Fuel tank will be 3 times bigger than current vsls.
A long-term commitment with charterers will be required for
building an ammonia fueled vessels.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 14
© 2019. NYK Group. All rights reserved.
Challenge 3 : Supply chain
4 challenges for feasibility of ammonia fueled vessels.
Fuel cost Fuel storage Supply chain Safety
Production Storage TransportationStorage &delivery
Bunkering to vessels
Consume fuel
Green ammonia supply chain
Bunkering infrastructure (including fuel bunkering vessels)
will directly impact to delivered price.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 15
Production capacity
Transport capacity
Bunkering infrastructure
Bunkering infrastructure
Safety
CCS
© 2019. NYK Group. All rights reserved.
Challenge 4 : Safety
4 challenges for feasibility of ammonia fueled vessels.
Fuel cost Fuel storage Supply chain Safety
Japan-Norway Hydrogen Seminar (25th Feb 2020) 16
1> Amendment marine safety standard➢ IGC Code (The International Code of the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk)
• This standard aims the safe carriage by sea in bulk of liquefied gases to minimize the risk to the ship, to its crew and to the environment.
• It was adopted by IMO and entered into force in 1986.• Current standards prohibit the use of toxic fuels.• This standard does not apply to non-ammonia carrier vessels such as
container vessels and bulk carriers.
2> Ensuring technical & operational safety ➢ We need to conduct a risk assessment and safety verification for corrosivity
and toxicity from the viewpoint of shipowner and operator.
For ensuring the safety for crew, vessels and environment, 2 actions will be needed.
© 2019. NYK Group. All rights reserved.
As user of green ammonia for the marine fuel, we have both technical and commercial challenges to overcome.
Summary
Fuel cost Fuel storage Supply chain Safety
Pilot fuels NOx Generator
In deep sea shipping industry, ammonia can be one of the most realistic solutions to achieve IMO target.
Collaboration with various partners such as charterers, shipping companies, shipyards, manufacturers and governmental authority (such as IMO) will be necessary.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 17
© 2019. NYK Group. All rights reserved.
CHAPTER
© 2019 NYK Group. All rights reserved.
Future demand of ammonia as marine fuel
2Reference 1
18
© 2019. NYK Group. All rights reserved.
Forecast for demand of ammonia fuel
According to DNV GL’s report, Ammonia accounts for 25% of total fuel demand in 2050. (=121million tons / year)
Data source: DNV GL Energy Transition Outlook 2019 (September 2019)
Japan-Norway Hydrogen Seminar (25th Feb 2020) 19
© 2019. NYK Group. All rights reserved.
Forecast for ammonia-fueled vessels
According to DNV GL’s report, ammonia-fueled vessels will begin to be launched in 2037 and almost 100% of new buildings use ammonia by 2045. (with strict enforcement of the GHG regulations)
Data source: DNV GL Energy Transition Outlook 2019 (September 2019)
Japan-Norway Hydrogen Seminar (25th Feb 2020) 20
© 2019. NYK Group. All rights reserved.
Around 40 vessels are under the regular service for ammonia transportation.(19.7 million tons/year in 2019)
Additional 185 Very Large Gas Carriers will be necessary for transpiration. (120 million tons/year in 2050)
Demand of green ammonia transportation
➢Where is the place of production and consumption ?
➢How about a capability of the production side for sustainable supply of green ammonia ? NYK MGC (LPG & Ammonia) M.V. Berlian Ekuator
Japan-Norway Hydrogen Seminar (25th Feb 2020) 21
Vessel size Very Large Gas Carriers Large Gas Carriers Multi Gas Carriers
NH3 cargo volume 47,000-55,000 ton 36,700-38,700 ton 22,500-24,500ton
© 2019. NYK Group. All rights reserved.
CHAPTER
© 2019 NYK Group. All rights reserved.
Company introduction
2Reference 2
22
© 2019. NYK Group. All rights reserved.
Trade NameNippon Yusen Kabushiki Kaisha(NYK LINE)
EstablishedSeptember 29, 1885
Main ActivitiesGlobal logistics based on international marine transportation business, cruises, terminal and harbor transport, shipping-related services, real estate, and others
Paid-in CapitalJPY144,319,833,730
Employees35,711 (consolidated)
RevenuesJPY1,829 billions (=USD17billions)
Overview
*As of March 31, 2019
*FY2018 result
Japan-Norway Hydrogen Seminar (25th Feb 2020) 23
© 2019. NYK Group. All rights reserved.
Medium-term management plan (2018-2022)
"Staying Ahead 2022 with Digitalization and Green".
Japan-Norway Hydrogen Seminar (25th Feb 2020) 24
© 2019. NYK Group. All rights reserved.
Evaluation as Top Company Ready for Low-carbon Transition
NYK has been ranked the top shipping company on business readiness for a low-carbon transition in the “A Sea Change” report published on June 25 2019 by CDP, an international non-profit promoting environmental disclosure.
Japan-Norway Hydrogen Seminar (25th Feb 2020) 25
© 2019. NYK Group. All rights reserved.
a Full-scale Demonstration Project on the World's First Global Hydrogen Supply Chain.
A Hydrogen Project, “AHEAD”
<Organic chemical hydride method>
• Hydrogen and toluene are converted into a liquid substance at room temperature and normal pressure called MCH (methylcyclohexane) by chemical reaction.
• In hydrogen demand countries, hydrogen is separated into toluene and hydrogen (dehydrogenation reaction) and supplied to consumers as a gas.
<Brunei> <Kawasaki, Japan>
Brunei H2 production plant
AHEAD outline
Members Chiyoda Corporation, Mitsubishi Corporation, Mitsui & Co. , NYK*Supported by NEDO
Business scale Max 210 tons / year (full charge for 40,000 fuel cell vehicles) (Transported by tank container in the demonstration experiment.)
the purpose & period
Aiming at commercial supply chain operation in anticipation of commercialization.Operation will start from 2020.
Advanced Hydrogen Energy Chain Association for Technology Development
Kawasaki deydrogenation plantOrganic chemical hydride method
Methylcyclohexane(MCH)
toluene
H2 H2
Japan-Norway Hydrogen Seminar (25th Feb 2020) 26
© 2019. NYK Group. All rights reserved.
Getting to Zero Coalition
• The coalition committed to getting commercial deep-sea vessels powered by zero-emission fuels into operation by 2030.
• NYK has joined the Coalition on Oct 2019 to implement next-generation fuels to aid marine-fuel decarbonization and contribute to environmental preservation for maintaining a sustainable society.
• NYK try to share our experience and knowledge regarding “development of new fuel supply chain” through our LNG Bunkering business.
Alternative fuels…
Green ammonia (NH3)
Hydrogen (H2)
MCH
Methane (CH4)
Advanced biodiesel
Japan-Norway Hydrogen Seminar (25th Feb 2020) 27
© 2019. NYK Group. All rights reserved.© 2019. NYK Group. All rights reserved.
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