MEA, AUGUST 6, 2020

© Wärtsilä 6.8.20201

MEA, AUGUST 6, 2020


PROGRAM

PRESENTATION # 1

LNG AS FUEL:

A CLASSIFICATION

SOCIETY PERSPECTIVE

PRESENTATION # 2

LNG AS THE TRANSITION

FUEL TO DECARBONIZED

SHIPPING

Q & A SESSION


WEBINAR PRACTICALITIES

The webinar is 45 min + up to 15 min Q&A

6.8.2020

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© Wärtsilä

POLL #1

6.8.20204

LNG AS FUELA CLASSIFICATION SOCIETY PERSPECTIVE

JOINT BV WARTSILA WEBINAR

AUGUST 6TH, 2020

JULIEN BOULLAND

© 2020 Bureau Veritas Marine & Offshore 6

LNG as Fuel in the Shipping Industry

1 – Lookback on LNG as Fuel projects

2 – How we got there, 2000 to 2020

3 – How LNG helps pave the way for Alternative Fuels

4 – How LNG remains relevant for the next decade


Look back - LNG as CargoApproaching 60 years of industry milestones

1962

Experimental LNGC Beauvais (26,000 m3)

1st BV LNG carrier Rules

1965

Jules Verne (25,000 m3)

1st BV classed LNGC

Descartes (50,000 m3)

1st Technigaz membrane type LNGC

1971

1975

Hanjin Pyeong Taek (130,000 m3)

1st membrane type LNGC

built in Korea (No. 96)

1995 2005

FSRU Excelsior (138,000 m3)

1st FSRU based on LNGC

Gaz de France Energy (74,500 m3)

1st Dual Fuel Diesel Electric LNGC

2006

Coral Methane (7,500 m3)

1st pure gas fueled multi-gas carrier

2009

Ben Franklin (125,000 m3)

1st large membrane type LNGC (Mk. I)

2016

1st icebreaking LNGC

Yamal LNG (172,500 m3)


Welcome to the gas age - LNG as Fuel 20 years of industry milestones

2016

2017

CMA CGM (22,000 teu)

1st membrane type Dual Fuel Ultra Large

Container ship

2016

Seaspan Swift (59 trailers)

1st Dual Fuel Hybrid cargo ship

2020

AET

VLCC

MSC World Class (2+2)

206,000 GT, total power 72 MW, propulsive power 44 MW

2017

PSAM – 2 tugs

Van Oord

Dredgers

Terntank (15,000 dwt)

1st ship (tanker) with WINGD 2-stroke Dual

Fuel engine


How did we get there ?

LNG as fuel – Codes / Standards / Rules / Guidelines

LNG Bunker Vessel LNG Fuelled Vessel

LNG Transfer Operations

2016

2009

2017



Example of Ultra Large Container Ship - 18,600 m3 LNG



Lessons learned from LNG bunkering operations

Repeat process (several operations per day)

Compatible with multiple users

Safe and suitable for cryogenic applications

▪ Adequate materials to cope with LNG temperature

▪ To withstand thermal cycles and to avoid fracture of materials

→ Light, handy, easy to lift and handle (e.g. avoid excessive

weight)

→ Think about necessary trade-off between perceived added

safety and ergonomics (e.g. double wall hoses ?)

→ Appropriate set-up to avoid leaks

→ Now it is robust


ISO/TS 18683 (published in 2015)

▪ Guidelines for systems & installations for supply of LNG as fuel to ships

ISO 20519 (published 2017)

▪ Specification for bunkering of gas-fuelled ships

ISO 21593 (published in 2019)

▪ Quick Connect / Disconnect coupling standard (QC/DC) for marine LNG

bunkering


LNG Bunkering Operations

→ Safety Distances and Risk Assessment

→ Safe Operations (and repeatable)

→ Simultaneous Operations


EU MRVFirst mandatory reporting

period starts 1 Jan

IMO GHGAdoption of initial strategy

by Apr (MEPC 72)

IMO DCS DoC for SEEMP Part II

by 31 Dec

20

18

IMO DCS First mandatory reporting

period starts 1 Jan

EU MRVVerified annual emission

report by 30 Apr

20

19

IMO NOxNorth Sea & Baltic Sea

ECA enters into force on

1 Jan (tier III)

20

21

IMO EEDIPhase 3 enters into force

on 1 Jan (up to 30%

reduction)

20

25

IMO SOxGlobal 0.5% Sulphur cap

enters into force on 1 Jan

IMO EEDIPhase 2 enters into force

on 1 Jan (up to 20%

reduction)

IMO DCSDoC on FOC report by

31 May (yearly)

20

20

IMO GHGAdoption of revised

strategy (COP 23)

20

23

How LNG helps to pave the way for alternative fuels

Green-House Gas Reduction (GHG : CO2, CH4, N2O, F-based gases)

IMO GHGReduction of CO2 emissions per tonne-mile by at least 40%

20

30

IMO GHGGHG Reduction 50% compared to 2008

CO2 Reduction 70% compared to 2008

Pursue efforts towards phasing out GHG emissions entirely

20

50


Energy transition to lower-carbon shippingTowards 2050 – Alternative fuel options

Hydrogen

LNG

Biofuels

(oil/gas)

Methanol/

EthanolLPG

Synthetic

methane/

SNG

Ammonia

Fossil

Ca

rbo

n n

eu

tra

lC

arb

on

“fr

ee

”

Key considerations

Life Cycle Assessment : How much Carbon is

produced on the whole lifecycle ?

• Method of manufacture

• Emission of pollutants during Manufacture and

Consumption

• Need to consider Renewable Energy and

Carbon Capture on the production side

Specific energy by weight and volume

Safety considerations : flammability, toxicity

Regulatory framework

Global availability of fuel

bunker = 265 MT equivalent HFO in 2019

Cost


How LNG helps to pave the way for alternative fuels

Commonalities of characteristics between LNG, Ammonia, Methanol/Ethanol, LPG and

Hydrogen

• Storage space (lower energy density compared to HFO/MGO)

• Cryogenic nature

• Cloud formation

• Toxicity (note : LNG is not toxic)

→ Safety and Understanding of Hazards

→ Experience building / Training / Competence for all stakeholders :

Developers, Authorities, Designers

→ Development of Standards, Codes, Guidelines

→ Infrastructure


LNG suitable as clean transition fuel

→Proven track record

→Expanding distribution network

→Step in right direction for CO2 / GHG reduction (despite fossil fuel, methane slip)

→Long term viability as biogas or synthetic methane / substitute natural gas (SNG),

in combination with carbon capture and/or direct LNG fuel cells

→ Combined cycle diesel/fuel cell with carbon capture could reduce CO2 emissions by 80%

How LNG remains relevant for the next decade


▪ Integration of 50 kW Solid Oxide Fuel Cell fueled by

LNG

▪ On-board production of electricity & heat

– 60% electrical efficiency

– Heat generated directly consumed on-board

– ~30% GHG emission reduction vs DF diesel engine

– No NOx emissions

– Multi-fuel compatible (LNG/methane, methanol, ammonia,

hydrogen, etc.)

→ Demonstrator on LNG-Fuelled “World” Class

Case study fuel cell technology and LNGPACBOAT applied R&D project


Key take-awaysHow LNG remains relevant for the next decade

• Robust Rules / Standards Guidelines are mature and available

• Equipments and Infrastructures are available

• Give the industry a head start

• “Bridge” Fuel that fulfills some of the IMO GHG Reduction Ambitions

• Took the industry 20 years to get there

• Need to work on the other two axis of GHG reduction : Design and Operations

SHAPINGA WORLD OF TRUST

MARINE-OFFSHORE.BUREAUVERITAS.COM/

https://marine-offshore.bureauveritas.com/

https://www.linkedin.com/showcase/bureau-veritas-marine-&-offshore/

https://twitter.com/BV_Marine

https://www.instagram.com/bureauveritas_marine/

https://www.youtube.com/channel/UCEJ-TCqw-3-fGWM7bYpAw2g

© Wärtsilä

POLL #2

6.8.202020

LNG AS THE TRANSITION FUEL TO DECARBONIZED SHIPPING

6 AUGUST 2020

MIKAEL WIDESKOG

21

© Wärtsilä

1 0,6 0,3

2008 2030 2050

Fleet emissions -50%

Vessel emissions -40% -70%

IMO TARGETS

m-files://show/0E02D501-CB13-44D4-8C10-D52BED7738B4/0-2043?property=PG1F4A4DDE8CED4EDB982CC0C9D7C226E5

m-files://show/0E02D501-CB13-44D4-8C10-D52BED7738B4/0-2043?property=PG6921D66411D44654B071A1413F031A1E

m-files://show/0E02D501-CB13-44D4-8C10-D52BED7738B4/0-2043?property=PG80BE608AC70B407D90E36C17A22F186B

© Wärtsilä© Wärtsilä

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

base year 2015 2020 2025 2030 2035 2040 2045 2050

High growth (Scenario 1)

Medium growth (Scenario 2)

Low growth (Scenario 3)

X 3

X 2.3

X 1.8

Source: In-house modeling based on CE-delft data as used by the IMO

GLOBAL FLEET IS SET TO GROWF

lee

t siz

e

(nu

mb

er

of ve

sse

ls, e

xclu

din

g le

isu

re, tu

g a

nd

fis

hin

g )

CAGR = Compound Annual Growth Rate

Assumed GPD growth rates:

• SSP1: CAGR of 4.1%

• SSP2: CAGR of 3.2%

• OECD:CAGR of 2.4%

Average over the last 56 years was 3.6%, as was 2018





0

1 000

2 000

base year 2015 2020 2025 2030 2035 2040 2045 2050

High growth (Scenario 1)

Medium growth (Scenario 2)

Low growth (Scenario 3)

The p

ath

to d

ecarb

onis

atio

n

Source: In-house modeling based on CE-delft data as used by the IMO

EMISSIONS WILL INCREASEY

ea

rly f

lee

t e

mis

sio

ns (

Mto

nn

es C

O2

eq

uiv

ale

nt)

2050 target

One ship’s lifetime…

940




Baseyear

2015 2020 2025 2030 2035 2040 2045 2050

Yearly Fleet Emissions (CO2 equivalent)

Medium growth scenario 40% emission improvement

DATA, TECHNOLOGY AND THE

ENERGY SOURCE WILL TAKE US TO

2030

Use of data in operation

• Increased fleet efficiency

• Increased asset utilisation

Energy storage and savings technologies

• Energy production optimisation

• Energy consumption optimisation

• Hybridisation (batteries, fuel cells, etc)

Energy source

• Fossil LNG

• Biofuel blends

• Renewable energy utilization (wind, solar,

etc.)

Fleet emission impact of -40% emissions per vessel

SUSTAINABLE FUELS AND

ADVANCED TECHNOLOGIES WILL

TAKE US TO 2050

• Bio/synthetic fuels for the combustion

engine

• Waste heat recovery

• Carbon capture

• Carbon credits

-50% GHG by 2050

for the whole fleet

rem

ain

ing

gap

Data adapted from CE Delft Proprietary data; same modelling methodology as used in the 3rd IMO GHG study

A SUSTAINABLE FUTURE REQUIRES CLEANER FUELS

25

One ship’s lifetime…

© Wärtsilä

Efficient Energy

Generation

Power Distribution

Vessel Energy Need

Optimized Voyage

The

ve

ssel p

ersp

ec

tive

Synthetic methane

BiogasLNG

The

fue

l pe

rspe

ctiv

e

Synthetic liquid fuel

Liquid biofuel

HFO

MGO

yes

Switch to gas possible?

Notes:• This pathway is valid for the bulk of the global shipping industry. • In certain areas, other solutions may be more logical and profitable.• Electrification of vessels will happen in segments where possible (IWW, short distance ferries, etc.) • The advent of on-road electromobility will continue to drive down battery and possibly fuel cell prices. • For longer haul applications, physics preclude the use of full battery electric ships.• H2, ammonia seen to play a smaller role for the coming 2 decades due to missing

rules/regulations/experience• Synthetic fuels are “hydrogen carriers”; built from green hydrogen and other elements to build a useable

and practicle fuel

Compatible with todays ships, bunkering infra, safety experience and regulations. Key to fast market takeup.

Methanol is the dark horse in this discussion. Easy to store, bunker and burn, it may leapfrog other fuels.

THE PATH TO DECARBONISATION

© Wärtsilä PUBLIC27

COMBUSTION ENGINE + BIO/SYNTHETIC LNG

COMBUSTION ENGINE + LNG AS A FUEL

IS A FUTURE-PROOF

SOLUTION TO 2030

WE HAVE TO START RIGHT NOW!

BRINGS YOU EASILY

TO 2050WITHOUT ANY ADAPTIONS ON YOUR ENGINE

ARRANGEMENT

LNG as Marine Fuel• A clean fuel, no after-treatment

needed for emission compliance

• Infrastructure in place/maturing

• Shifting from diesel to fossil LNG reduces CO2 emissions by 7 to 21%

• Reliable engine technology. More than 2100 engines > 26.000.000 running hours

• Providing an infrastructure and the pathway for renewable fuels

• Easy to blend with BioLNG and Synthetic LNG

Wärtsilä engines are extremely fuel

flexible and capable of using almost all

liquid and gaseous fuels, including green

ammonia, hydrogen and methanol

© Wärtsilä28

DEVELOPMENT OF ENGINE TECHNOLOGY IS ONGOING

Verified: 2015 Indicative: 2020, Verified*: 2025Verified: 2003 Indicative: 2020, Verified*: 2022

* timing depends on the market demand

Ammonia

We have already

technologies that are

capable of using Ammonia.

The needed combustion

concepts to maximise engine

performance and related

safety technologies are

currently being investigated

Methanol

A methanol conversion package

is available for the ZA40 engine

and we have the technology to

burn methanol.

The next step is to industrialise

this technology on the relevant

portfolio engines according to

market needs.

Bio- or Synthetic

methane

Contains about 99%

methane and can readily be

used in liquid form with

equipment made for LNG.

Hydrogen

Our gas engines are already

able to blend LNG with up to

25% hydrogen, and

combustion concepts are

specified for 100% hydrogen.

Our future efforts will be

directed towards maximising

engine performance.

CH4 MeOH NH3 H2

Time schedule for engine performance

© Wärtsilä29

WE HAVE THE KNOWLEDGE AND TECHNOLOGIES TO

BURN THE FUTURE FUELS

* FAME, HVO: biodiesel

Engine type Diesel LPG LNG FAME/

HVO*

Bio-

methane

Hydrogen Ammonia Methanol Synthetic

methane

Diesel • • • •

DF • • • • • • • • •

SG • • • • • •

GD • • • • • • • •

LG • • • • •(MGO only)

Ready solution

Development needed

Industrialisation needed

•••

© Wärtsilä30

THE COMBUSTION ENGINE: A TRUE OMNIVORE

Fuel availability, transportation, storage, safety and regulations determine the environmentally and economically sustainable solutions.

WITH 95% PARTS COMMONALITY, THE ENGINE IS NOT THE LIMITING FACTOR

HFO, MGO, HVO, LNG, LPG, HYDROGEN, METHANOL, AMMONIA, ...





1. The energy sources at hand including alternative fuels and fuel flexibility are as important elements

on the road to decarbonisation as data and new technologies

2. Fuel flexibility, enabled by the combustion engine, is more important now than ever, de-risking todays

investment decisions

3. We need to invest in future fuels where applicable (and complementary energy sources) – and we

need to invest today

4. With existing products, solutions and infrastructure at hand we can reach the 2030 if we act now – for

2050 targets there must be further development done

5. LNG is the best route to decarbonisation, transitioning from fossil LNG to bio- and synthetic LNG

KEY TAKE AWAYS 2030 is tomorrow, 2050 is one ship lifetime away




© Wärtsilä

POLL #3

6.8.202032

© Wärtsilä

Q&A SESSION

6.8.202033

Documents

MEA, AUGUST 6, 2020