Low carbon fuels;

Plotting the course

to carbon neutral
shipping
DUBAI, SEPTEMBER 2023

This presentation and the information disclosed in connection herewith is strictly private,
confidential, and personal to the recipients and should not be copied, distributed or reproduced in
whole or in part, nor disclosed to any third party.
PART 1

IMO STRATEGY
AGENDA
1. IMO STRATEGY

2. THE TRANSITION DRIVERS

3. NEW FUELS

4. THE OUTLOOK

5. DEEP DIVE OF THE NEW FUELS

6. THOUGHTS ON PRICING FOR FUTURE

FUELS

7. PATHWAYS TO REDUCING EMISSIONS

8. OUR ROLE AND ACTIONS

3
 OUR GOAL IS TO BECOME THE LEADING INDEPENDENT FACILITATOR
IN TRANSITION TO NET ZERO
Delivering compliance with IMO targets
Total GHG emissions
The figure is only used for illustrative purposes reach net-zero by
or around 2050
Total: 70% reduction
Total: 20% reduction (striving for 80%) We will achieve the goal by
(striving for 30%)
Intensity: 40% reduction working proactively to
Baseline
Net-zero energy share: 5%
(striving for 10%)
ensure that our customers
year have access to fuels with
2008
the requisite carbon
intensity to ensure
compliance with all relevant
global and regional
Peak as soon
as possible
legislation.

2008 2020 2030 2040 2050

Legend
Emissions pathway in line with
Business-as-usual emissions Emission gap
IMO’s revised GHG strategy

Source: DNV

4
PART 2

THE TRANSITION
DRIVERS
STAKEHOLDERS INFLUENCING THE GREEN TRANSITION
REGULATORS FINANCIAL INSTITUTIONS TECHNOLOGY READINESS
▪ Ship designers and engine manufacturers impact the
green transition by increasing energy efficiencies and
• Important regulators are the IMO, regions (e.g. • Financial institutions are beginning to focus more on designing the engines to be compatible with new fuels.
the EU, & the US), and nation states. setting concrete climate targets for the shippers
▪ Ammonia ready engines are still 1-2 years away from
when making new loans. being ready for customers to order.
• IMO has made the long-term 2050 GHG
• Poseidon-Principles is a framework for integrating ▪ Technology for mitigating methane and N20 slip from
reduction strategy and short-term measures like
climate targets into lending decisions. LNG and ammonia will be critical for ensuring the
REGULATORS / LAWMAKERS
EEDI, & EEXI. FINANCIAL INSTITUTIONS / TECHNOLOGY
future relevance READINESS
of these fuel choices
(PUSH) • New loans are often linked
ACCESS to a company’s ESG
TO CAPITAL
• Shipping will be included in the Emission Trading targets ▪ Large scale production of low carbon ammonia,
System or making a carbon levy. methane and LNG will need to develop over the coming
decade

NEW FUEL INFRASTRUCTURE INDUSTRY CHARTERERS CARGO-OWNERS

• Cargo-owners are pushing the development of the

• New fuels require investments in tanks, pipelines, • Example: The Sea Cargo Charters. green transition by requesting their shipment to be
barges and port infrastructure. low- or zero carbon.
• Purpose: Participation in coalitions,
• Collaboration between ports to develop green • An important driver is the cargo-owners’ willingness
commitment to assessment policies and
corridors to pay the price difference.
partnerships.
NEW in
• New dynamics FUEL
the INFRASTRUCTURE
world trade of liquid fuels NGO’S / LOBBY • Cargo-owners CARGO-OWNERS
like IKEA, H&M, Nike, Unilever, and
• Participants include ADM, Shell, Cargill etc. BMW are some of the companies, who has
ORGANISATIONS (PULL)
promoted the use of new fuels in their shipments.

6
THE REGULATORY FRAMEWORK TO REDUCE GHG EMISSIONS
Recently implemented frameworks Fleet emmisions Up-coming

Carbon intensity indicator FuelEU Operational requirement on

CII rating GHG intensity
CO2 Maritime
CO2
Design requirement for Emission cap and trade of
EEXI energy efficiency ship index CO2 EU ETS allowances

IMO mid- Required GHG intensity of marine

Ship energy efficiency fuels & GHG emissions pricing
SEEMP III management term mechanism (IMO to agree how by
measures 2025)

7
PART 3

NEW FUELS
FUEL MIX - THE TRANSITION HAS STARTED
2015 2022 2025 2030

% of the fuel mix ?%

18% 18%

?%
80%
54%
60%

?%

?% New fuels
LNG, 2% LNG. 5% 20%
20% expected to
20% Biofuels, 0.5% Biofuels, 2% ?%
increase to
Methanol, 0.1% Methanol, 1% ?% ?% around 20%.

Legend
HFO VLSFO MGO LNG Biofuel blends Methanol Ammonia

Estimates based on internal study

9
WELL-TO-WAKE EMISSIONS WILL BECOME THE BEST PRACTICE

WELL-TO-WAKE:
Refers to the emissions for the entire process from fuel production and delivery to use onboard ships

WELL-TO-TANK TANK-TO-WAKE

Raw material Fuel prodiction Transportation Bunkering Storage on- Energy conversion Energy transfer
and storage board to propeller

10
 UPSTREAM (WELL-TO-TANK) EMISSIONS MATTER
Well-to-Wake Emissions in Gram CO2eq. per kWh – GWP100

E-methanol 7 -99% Legend

Legend
Biodiesel (adv. fame) 51 0 -92%
WTT • The way in which emissions
TTW CO2
from shipping are calculated
E-Ammonia 75 -89% TTW other GHG (CH4+NO2)
% (CH4+NO2)
Savings is changing to reflect the full
BioLNG (organic waste) 99 12 -83% % Increase life cycle profile from
production through to
BioMethanol 225 7 -65%
consumption on board.
B30 (VLSFO and Biodiesel, adv. fame) 82 391 7 -27%

LPG 60 475 6 -17% • This form of lifecycle

assessment (known as well-
LNG 133 404 12 -16% to-wake) allows for a holistic
HFO w/ scrubber 69 558 10 -3% approach to carbon
assessment and will form the
MGO 104 541 9
basis of future regulations.
VLSFO 95 558 10 1%

Methanol (from natural gas) 225 499 7 12%

Biodiesel (1 generation) 829 9 28%

Ammonia (from natural gas) 874 75 45%

Source: Lindstad/Smart Maritime, 2021, except biodiesel

(adv. Fame) based on ISCC LCA methodology
11 CO2eq. change compared to MGO
PART 4

THE OUTLOOK
STATUS ON THE NEW FUEL PARAMETERS
Parameter VLSFO LNG Biofuels* Methanol Ammonia Hydrogen OUR VIEW ON THE DEVELOPMENT IN NEW FUELS

Availability • The range of options within new fuels has evolved a lot
in recent years and therefore patience, analysis and
Energy Density monitoring are key.

Emissions • LNG has been on the agenda for decades now,

therefore, the transition is showing a positive indication
Adoption regarding pricing, safety and capital expenditure.

Infrastructure • Biofuels are getting more attention because of the high

commercial readiness and low capital expenditure.
Safety
• Methanol is one of the long-term solutions showing a
Price more optimistic path in terms of safety and capital
expenditure. Questions remain over the availability and
Capital expenditure scalability of green methanol supply.
Commercial readiness • Ammonia remains on the cusp of being commercially
ready due to the issues with safety, missing
Legend infrastructure developments, and lacking availability.
Positive Negative
Neutral indication
indication indication
2nd and 3rd generation Biofuels
13
THE GREEN TRANSITION OF THE MARITIME INDUSTRY
Short Term Medium Term Long Term
• Conventional fossil-based bunker fuels • LNG & biofuel will begin to take a larger • An uptake of carbon-neutral fuels will take
continue as the most dominant products. share of the fuel mix. place, once a clear and robust regulatory
These begin to be augmented with biofuels. framework is in place.
• Low Carbon Methanol becomes available
• LNG is an available lower carbon alternative in multiple locations. • Further development of blue and green
with a positive pathway to decarbonization. sources of supply will facilitate the uptake
• Challenges around scale of supply of low of hydrogen-based fuels.
• Moreover, focus is on improving energy and zero carbon fuels will persist.
efficiencies on ships to reduce the amount of
fuel burned.

2023 2030 2035/2040 2050

Pathways Today Short term Medium term Long term

From conventional fuels VLSFO Biofuel (FAME, HVO) New Bio-based fuels (pyrolysis, HTL, etc)

From fossil LNG LNG Biomethane E-methane

Low Carbon Methanol

H2-based solutions E-ammonia

E-hydrogen (short sea,

inland)
14
THE FUEL TRANSITION IN SHIPPING HAS STARTED AND IS
ACCELERATING
Alternative fuel uptake in the world fleet by number of ships and gross tonnage

Source: IHSMarkit (ihsmarkit.com) and DNV’s Alternative Fuels Insights for the shipping industry –‡AFI platform (afi.dnv.com) as of July 2023

15
PART 5

DEEP DIVE OF THE

NEW FUELS
THE NEW TYPES OF FUELS

BIOFUELS LNG METHANOL AMMONIA

17
BIOFUELS IN A NUTSHELL

18
IMO target to reduce carbon emissions
from international shipping by 40% by
2030 and 70% by 2050.
BIOFUELS REGULATIONS IN SHIPPING
• Full LCA (WtW) makes biofuels an attractive
solution to decarbonize

• CII will drive biofuels demand as biofuels are

an immediate viable solution to decarbonize
(up to 90% GHG savings)

• EEXI/EEDI will have no effect on biofuels

FuelEU Maritime, will apply to all vessels

of any flag above 5,000 GT travelling
to, from or at berth in ports in the EU*
with increasing a GHG intensity
reduction target from 2025

• EU MRV will drive demand for biofuels as it

requires the reduction of the annually
reported CO2 emissions

• EU ETS could drive demand for biofuels with

decreasing cap on emissions allowances

19 Source: DNV, Maritime Forecast to 2050

WHAT ARE BIOFUELS?
INTRODUCTION TO BIOFUELS

• Currently, the most viable and suitable biofuels for use in the maritime industry are fatty acid methyl
ester (FAME Biodiesel) & hydrotreated vegetable oil (HVO). FAME Biodiesel & HVO are drop-in fuels and
can be used with existing engines technology and utilize current fuel infrastructure.
• Biofuel covers a wide range of products. Thus, the full landscape of different biofuel products,
generations, feedstocks and blends is very complex.
• Biofuels from certain feedstocks are considered renewable and give immediate emission reductions
based on the well-to- wake LCA principle.
• Three different generations of biofuels exist. The feedstock from which the fuel is derived from differs
between generations.
• 2nd and 3rd generation biofuels are produced from waste and residue are all classed as sustainable.

1ST GENERATION 2ND GENERATION 3RD GENERATION

Biofuels that are produced Biofuels that are not produced Biofuels that are derived from
directly from food crops, which from food crops but from waste algae, which are capable of
is known as conventional and residual oils. higher yields with lower
biofuels. resource inputs.
Examples: Examples: Examples:
Corn, wheat, soybean oil, Used cooking oils, tallow, waste Only non-food crops like
rapeseed oil, sugar cane and residual oils microalgae and macroalgae,
POME, tall oil, etc.
IMO: Allows for 1st generation feedstock provided that it meets sustainability criteria and results in min 65% GHG
reduction
20 Considered as fossil under FuelEU Maritime well-to-wake (full LCA).
BIOFUELS DEMAND IN SHIPPING
• Biofuels demand expected to
increase due to regulations in road
transport, marine and aviation.

• Marine is competing with Aviation

and the Road Transport.

• New orders show that majority of

ships will run on conventional
marine fuels, being able to use
Projected fuel mix for container fleet biofuels as drop-in fuel.
Realistic pathway will require lower growth & high efficiency

• Biofuels expected to be a bigger

part of the future fuel
mix and most relevant until 2040.

• Beyond 2040 biofuels will stay a

preferred pilot fuel.

21
Source: Transport & Environment, 2023
Biofuels are widely available as they
are a viable and well tested low
BIOFUELS SUPPLY IN SHIPPING
Potential of global supply for sustainable biofuel compared to maximum simulated
carbon solution in road transport demand from shipping and shipping’s share of global energy use today
since 2009

Main feedstocks for marine will be 2nd

and 3rd generation feedstocks.
• 1st gen feedstocks are limited by
regulation: IMO: Sustainability criteria min.
65% GHG reduction. EU: 1st gen
considered fossil in FuelEU Maritime

• Waste feedstocks and residues are widely

available feedstock today Sustainable and economical biofuel potential by feedstock category in 2030 and 2050

• Sourcing of 3rd gen advanced feedstocks

and according scalable production is
expected to ramp up until 2030

US and Asia will be ramping up on

biofuels production as of 2024 (mainly
HVO)

22 Source: DNV, Biofuels in Shipping whitepaper

 RELEVANT BIOFUELS FOR MARINE
Biodiesel Renewable Diesel Co-processed Blended Products
(FAME) (HVO) Marine Gasoil (Biofuels/Marine)
• Through transesterification glycerin is Produced by hydrogenation and • Refining through co-processing of • Blending with VLSFO requires careful
separated from the feedstock, which hydrocracking of vegetable oils and waste sustainable feedstock together with handling and the blend will not comply
creates methyl esters (FAME). Through oils using hydrogen and catalysts at high fossil feeds. Turned into co- with ISO 8217 standards
distillation impurities are removed from temperatures and pressures in the presence processed marine fuel through
the Biodiesel. of a catalyst cracking, distillation and • Covered by marine ISO standards
hydrotreating ONLY if they are used for MGO blends
• Marine ISO standards only cover FAME • It provides characteristics closer to gasoil, and only up to 7%
for MGO blends up to 7% e.g. higher calorific value vs FAME, but • GHG savings up to 80%
lower density ~ 0.79 • All blends from B8, B10, B20, B30 and
• Vessels can technically use 100% FAME, • Compliant with ISO 8217 up to B100 are acceptable by MARPOL
although minor operational and fuel • Can blend with any type of marine fuel
handling adjustments might be required (VLSFO, MGO, HSFO, ULSFO) • However, customers must verify with
the engine manufacturer & potentially
• Can blend with any type of marine fuel • Preferred product in road transport, higher Insurance
(VLSFO, MGO, HSFO, ULSFO) price vs FAME

• International standards: ISO 8217:2017, • International standards: EN 15940, ASTM D

EN 14214, ASTM D6751, EN 590 975

All products can be used as a drop-in marine fuel, either as B100 or as a blend, without requiring any modifications to the engine or system

23
BUNKERING BIOFUELS

24
WHERE CAN YOU GET BIOFUEL TODAY?
BIOFUEL SUPPLY LOCATIONS

• Legislation in the transport sector has

driven biofuel infrastructure
developments.
• Therefore, the infrastructure on the
land side is highly developed, while
marine specific biofuel infrastructure
is scarce. However, last mile delivery
for bio bunkering is being developed
rapidly.
• Drop-in biofuels like Biodiesel (FAME),
can use the existing bunkering
infrastructure, which makes it easier
to ensure supply worldwide.
• It will in many cases be possible to
source biofuels outside the areas
marked on the map.

25
THE NEW TYPES OF FUELS

BIOFUELS LNG METHANOL AMMONIA

26
LNG IN A NUTSHELL
WHAT IS LNG? HOW IS IT STORED?
• Natural gas like pipeline gas • Must be stored in special insulated tanks
• Super-cooled to -162°C • Come in pressurized and non-pressurized forms
• 600 times the energy density of pipeline gas • LNG bunker tanks range between 2-2.5 times the size of comparable conventional fuel
• LNG is often measured in energy units, $/mmbtu (1 $/mmbtu of LNG = ±47 $/mt of LNG) tanks
• MGO/biofuel as pilot fuel will still be needed (±2-3% of LNG volume)
HOW IS IT BUNKERED?
IS THIS AN ESTABLISHED MARINE FUEL TODAY? • Ship-to-ship, truck-to-ship, shore/pipeline-to-ship
Yes: • Small LNG tanker, varying in size between 600-20.000 m3 capacity
• LNG tankers have run on LNG for over 50 years with uptake across other sectors • Compatibility studies between bunker/receiving vessel to be performed (more complex vs
beginning in 2000. conventional fuel)
• The use of LNG has so far grown mainly in the container, car, and cruise segments. • Port authorities validates bunker procedures for each vessel segments

IS IT A “GREEN FUEL”? HOW IS IT BURNED ONBOARD?

Yes: • LNG needs to be returned to its gaseous form to be used
• Near total reduction of SOx • Achieved by passing LNG through a heat exchanger
• Significant reduction in particulate matter and NOx. • Engines must be designed or specifically adapted to use LNG
• Between 8-23% CO2 saving on full lifecycle basis, depending on engine technology • Engines come in both pure gas (only LNG) and dual fuel (LNG and conventional fuels)
• Bio-LNG from waste can provide CO2 reductions of up to 90%
But:
• Small amount of unburnt methane is emitted – the Methane Slip
WHERE CAN WE GET IT FROM?
• 2-stroke engines emit less than 4-stroke engines • Widely available in large scale cargoes worldwide
• Fossil LNG is not viewed as a “sustainable fuel” but a transition fuel • Europe, North America and much of Asia, benefit from a well-developed network
• Possible future bottleneck: LNGBV & terminal loading capacity
• LNG as bunker fuel is expected to be available in Panama, Middle East and on the US West
WHAT ARE THE MAIN SAFETY CONSIDERATIONS? Coast by around 2025
• LNG is a low flashpoint fuel
• LNG is a cryogenic product
• Use of appropriate PPE & application of standard bunker guidelines is essential
HOW DOES IT PRICE COMPARED TO CONVENTIONAL FUEL?
• Guidelines for handling are laid out in IMO IGF Code • LNG can be sold on an oil indexed basis or priced at a defined premium over pipeline gas.
• Natural gas prices vary significantly around the world and regional LNG pricing strongly
27 reflects this.
LNG BUNKER UPTAKE
Projected Growth in Global LNG Bunker Demand

• Uptake in orders for dual fuel LNG powered vessels has 1000 12,000,000
continued throughout 2022 and 2023, accumulating by

Annual bunker demand in tons

900
mid-2023 to 400+ ships in operation and additional 10,000,000
800

Number of vessels in operation

520+ in the orderbook
700
8,000,000
• Natural gas prices have been exceptionally high 600

in Europe and Asia in 2022, resulting in LNG becoming 500 6,000,000

temporarily un-competitive against conventional marine 400
fuels 300
4,000,000

200
• Since mid-2023, LNG became back again cost 2,000,000
100
competitive and commercially viable in Europe and Asia.
0 -
2018 2019 2020 2021 2022 2023 2024 2025 2026
Legend
Number of LNG fuelles vessels in operation

Potential Annual LNG Bunker Demand in Tonnes

28 Source DNV, Clarksons and BH assessment data as of July 2023

LNG BUNKER DEMAND GROWTH BY SEGMENT
Growth to 2026 in Selected Vessel Segments Associated Growth to 2026 in potential LNG Bunker Demand (Tons LNG)

300 5,500,000

5,000,000
250 4,500,000

4,000,000
200
3,500,000

3,000,000
150 197 84
2,500,000

2,000,000
100
1,500,000
128
107 1,000,000
50 44
55 22 500,000
29 17
0 13 -
Car Carriers Container Tanker Bulker Cruise Car Carriers Container Tanker Bulker Cruise

Legend Legend
Vessels on order to end 2026 Additional bunker demand by end on 2026

Vessels in operation Bunker demand today (tons)

29 Source DNV, Clarksons and BH assessment data as of July 2023

BIO-GAS INTRODUCTION The future of bio-LNG
• Bio-methane holds significant potential
to deliver deeper carbon reductions,
beyond with fossil LNG.

• Bio-methane is molecularly identical to

Bio-LNG production process Sustainable global production potential fossil methane (CH4)

Mtoe • Europe has over 1,000 Biogas

production plants – 87% connected to
Biogas Biomethane 250
Organic Consumption the gas network.
matter

• Biogas production in the EU in 2021 is

200 estimated at 200TWh – equivalent to
Anaerobic
digestion 16mtpa of LNG.
Upgrading
150 • Bio-methane can be secured on a
“mass balance” basis in US and
Digestate Northwest Europe.
100
Gas
network • Bunker Holding will have access to
limited quantities of physical bio-LNG
50 in Denmark from 2024.
Biomass
gasification & • Prices at a premium to conventional
methanation Asia North C&S Rest pipeline gas
Europe Africa of the
Pacific America Ame
rica World
• Bio-methane can be produced from
Source: IEA Outlook for biogas and biomethane 2020. Notes C&S America = Central & South America. Woody numerous feedstocks and processes
biomass feedstocks are available only for biomethane
• Sustainable global potential is
assessed to amount to c.730Mtoe

30
THE NEW TYPES OF FUELS

BIOFUELS LNG METHANOL AMMONIA

31
METHANOL IN A NUTSHELL
WHAT IS METHANOL? HOW IS IT STORED?
• Liquid fuel, similar to conventional fuel to handle • Methanol is stored in a conventional style tank (similar to conventional fuels)
CH3OH
• The simplest form – The
of alcohol same
with the mostnumber
favorable hydrogen to carbon Requires
ratio a fuel tankused
• Tanks of 2.5x
for the storage of methanolConventionally produced
need to have an advanced coating (typically
• Energy density just under half that of conventional marine fuels Inorganic Zinc) applied to all surfaces
of hydrogen and carbon size compared to INCREASES W-t-W emissions by
molecules as methane. conventional fuels. 5-15% compared with
IS THIS AN ESTABLISHED MARINE FUEL TODAY? HOW IS IT BURNED ONBOARD?
No: conventional
• Requires a methanol capable engine (not a conventional fuels.
diesel or fuel oil one)
• Used in limited capacity and as fuel onboard methanol carriers since 2016 • Engines are available in 2-stroke and 4-stroke configurations
• Not widely available • All methanol engines require a pilot fuel
• Full regulatory guidelines not yet complete
Renewable methanol can Global supply of grey
WHERE CAN WE GET IT FROM? Global supply of green methanol
IS IT A “GREEN FUEL”?
reduce CO2 emissions by methanol is currently is estimated
• Globally traded, but not widely available toforbebunkering
in small parcels less than
Yes: up to 95% compared to c.115mtpa (equivalent
• Dedicated to
supply chains developing in 0.3mtpa.
NW Europe.
• When produced from fossil fuels, methanol has little/no environmental benefit over • May be offered at methanol production and terminals worldwide in the future
conventional fuels.
conventional fuels c.46mtpa of VLSFO).
• Green methanol can be produced from both bio-waste and renewable energy with
biogenic carbon capture.
HOW DOES IT PRICE COMPARED TO CONVENTIONAL FUEL?
• Green methanol has the potential to reduce full life cycle emissions by up to 99% for • Fossil based methanol prices in a similar range to MGO (although without co-relation)
e-methanol and 70%+ for bio-methanol • Green methanol prices at a significant premium to conventional marine fuels (c.2-3x)
• Reduces NOx emissions by 30-60% Considered a low flashpoint
Liquid
• Significant reduction in fuel and matter
particulate relatively
fuel – Use is governed by
simple to store.
WHAT ARE THE MAIN SAFETY CONSIDERATIONS? the IGF Guidelines.
• Methanol is a low flashpoint fuel (flashpoint 11-12°C
• Methanol can be highly toxic if ingested or inhaled as vapor

32
METHANOL INFRASTRUCTURE AND UPTAKE

Methanol take up is principally being driven by a handful of companies

204 vessels in operation or on order – including 37 tankers and 143

container ships

Dedicated methanol bunker locations exist in Germany and Sweden

Conventional tankage and barges could be adapted for methanol if

demand increases

117 methanol terminals worldwide – This does not equate to methanol

“availability”

Excluding methanol tankers, bunker demand from methanol fueled

orders will reach just over 3,250,000 tons VLSFO equivalent by 2026

33
UPTAKE OF METHANOL AS A MARINE FUEL
Development of Methanol Fueled Fleet Methanol Fueled Fleet by Segment

180 160
160
140
140
120
120
100
100
80
80
60
60

40 40

20 20

0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Legend
Vessels in order
Vessels in operation
Source DNV and BH assessment, Data as of March 2023

34
THE NEW TYPES OF FUELS

BIOFUELS LNG METHANOL AMMONIA

35
 • IMO IGF Guidelines currently prohibit the use of ammonia as fuel. Updated and complete
WHAT IS AMMONIA? guidelines for the use of ammonia as fuel are still some years away.
• The only fuel considered for deep-sea vessels which doesn’t contain a carbon molecule
• Liquefies at -33°c. at ambient pressure
• Energy density c.30% of conventional marine fuel HOW IS IT STORED?
• Ammonia is stored in double walled tanks, either refrigerated to –33c. Or under pressure.
IS THIS AN ESTABLISHED MARINE FUEL TODAY? • Ammonia tanks need to be 3-3.5x size of conventional fuel tanks to provide the same
range.
No:
• At this time ammonia is only just moving from concept to reality
• First “ammonia ready” engines are likely to be available in 2024 HOW IS IT BURNED ONBOARD?
• Ammonia needs to be burnt in a specially designed engine
• Ammonia will require pilot fuel to achieve ignition
IS IT A “GREEN FUEL”? • Ensuring the total abatement of rogue emissions may require the vessel to have a special
Yes:
exhaust system installed
• Ammonia can be produced via two different carbon neutral avenues:
• from natural gas with carbon capture and sequestration
• through electrolysis from renewable electricity WHERE CAN WE GET IT FROM?
• Both types have the potential to reduce CO2 emissions by close to 100 • Green and Blue ammonia are virtually non-existing products today.
But: • However, supplies of both fuels are likely to develop in the coming years in USGC, NW
• Ammonia fuelled engines may require a significant amount of pilot fuel Europe, Middle East, and Oceania within the next decade.
• Ammonia has the potential for emissions of N2O. The resolution of this problem is
crucial for the environmental credibility of ammonia HOW DOES IT PRICE COMPARED TO CONVENTIONAL FUEL?
• Green ammonia is likely to price at a significant premium to conventional fuels for some
WHAT ARE THE MAIN SAFETY CONSIDERATIONS? time (c.1.5-2x)
• Ammonia is highly toxic and highly corrosive • Blue ammonia has the potential to price at a modest premium (potentially as low as 20%)
• Exposure to even small quantities of ammonia can result in life changing injuries or even over conventional marine fuels.
death

36
EXTERNAL SR | THE DIFFERENT AMMONIA FUEL TYPES
Ammonia fuel types & value chain Differences between grey,
blue & green ammonia
• Different ammonia
production paths offer
varying degrees of
decarbonization.
• Depending on efficiency of
CCS process, blue
ammonia can afford 65-
98% decarbonization
(“blue” to “deep blue”).
• Green ammonia can
theoretically be 100%
carbon neutral.

37
 AMMONIA AS A MOLECULE 1/2
Ammonia as a molecule is challenging to handle…

• is considered toxic, causing skin corrosions and burns

• is hygroscopic, it can cause frost and alkaline burns

• is corrosive: avoid materials such as brass, copper etc

… but manageable

• on a Hodge & Sterner scale, LC50 around 2000ppm,

ammonia is located at the frontier between slightly and
moderately toxic

• serious effects will appear after prolongated exposure to

concentration 10x higher than odour threshold (above
500 ppm for 1h) LC50:
amount inhaled by test animals that causes death in 50% of the cases,
which becomes the dose required to show a toxic effect on humans
• has a pungent odour and can be detected by smell at
very low concentration (from 20 - 50ppm)
38
 AMMONIA AS A MOLECULE 2/2
Safety risks related to flammability properties Safety risks related to storage, release and
dispersion properties

Source: DNV

• Auto-ignition only @ 650°C Source: DNV

• Flammability range requires high vapour concentration
(difficult to ignite) • Expands 850 times when vaporized

39
 SAFETY CONCEPT
Could the IGF safety concept for LNG also suitable for ammonia?

Source: DNV

40
GOING FORWARD
What is the industry doing: What is BHG doing:

• Before ammonia can be widely adopted as a • MoU with Yara Clean Ammonia
maritime fuel, robust safety regulations and
guidelines must be developed to govern vessel − Cooperate in developing the market for ammonia
design, bunkering operations, and on-board as a shipping fuel
storage and use.
− Exploring opportunities to supply clean ammonia
• The industry has already developed such as a marine fuel to first movers in the shipping
regulations for new fuels like LNG, LPG, and industry
methanol.
− Connecting two key elements of the supply chain
• For ammonia – although the hazards are
different, with its low flammability and its high − a global producer of clean ammonia
toxicity – the process for developing these
regulatory codes will be the same. − the largest bunker supplier to assure the last
mile

41
PART 6

THOUGHTS ON
PRICING
THOUGHTS ON PRICING
Assessment of alternative fuel prices in ARA
This chart reflects pricing trends… It is not explicitly a price forecast!

Chart represents pricing range based on USD/ton

4,000
VLSFO energy equivalent pricing
3,500

3,000

2,500

2,000

1,500

1,000

500

0
E-Methanol Bio-Methanol E-Ammonia Blue Ammonia Biomethane IFO 380 MGO VLSFO LNG Current FAME FAME 2nd
/ BioLNG Market 2nd Gen. Gen.+Dutc
h HBE

Legend
Source: BH assessment Price range CO2
43
PART 7

PATHWAYS TO
REDUCING
EMISSIONS
 PATHWAYS TO REDUCE GHG EMISSIONS
Achieving the goals of the Revised IMO GHG Strategy towards reaching net-zero GHG emissions by
or around 2050 will require a mix of technical, operational and innovative solutions applicable to ships.
Some of them are highlighted here.

Slow steaming – to reduce the amount of fuel burned by sailing in a slower

pace, which results in lowering of the emissions produced.

Fleet- & voyage optimisation – utilising demand management to improve the

fleet and voyage plan.

Energy- & operational efficiency – reduce emissions by using new technology

to improve the energy efficiency of the machinery, equipment and ship design.

New fuels – include the substitution of conventional fuel oil with new fuels like
LNG, LPG, biofuels, methanol, hydrogen, ammonia, and synthetic fuels.

Alternative technologies – the option to use new innovative technologies like

batteries, fuel cell systems, carbon capture, and wind-assisted propulsion.

Carbon offsetting & trading – buying verified carbon offsets on the carbon
trading market, where you support green projects that reduce emissions.

45
TECHNICAL AND OPERATIONAL CONSIDERATIONS
Operational Measures

Onboard performance optimization

• Routing
• Weather routing
• Trim
• Draught
• Hull fouling
• Propeller fouling
• Just in time arrival

7% - 10% savings

46
PART 8

OUR ROLE AND

ACTIONS
OUR ROLE IS TO CONNECT THE DOTS BETWEEN PRODUCERS AND
CUSTOMERS

48
STRATEGIC INITIATIVES FOR NEW FUELS & CARBON MARKETS

Green Centre Short-term Long-term fuels Voluntary Mandatory

of Excellence New Fuels & Partnerships Carbon Markets Carbon Markets
A new Increase access to Strategic Advisory capabilities Supporting our
sustainability biofuels and LNG in Partnerships & and an offering of customers
department to offer key markets investments within high-quality projects complying with EU
more guidance & methanol & ammonia ETS regulations
support to our
customers

49
BUNKER HOLDING’S PLACE IN THE VALUE CHAIN
Bunker Holding Group is committed to support the
Corporate
establishment of the bunker infrastructure needed to
Strategy
supply zero emission bunker fuels.

Identification of storage opportunities and potential

Storage investments in storage facilities, utilizing our existing
network.

Bunker Ability to bring extensive knowhow for establishing and

operations running physical bunkering operations.

Marketing
& sales to BHG is the world’s largest supplier and trader of marine
fuels with an estimated global market share of 10-15%.
marine

Sustainability ISCC certified entities.

registration

50
BUILDING A GLOBAL NETWORK OF SUPPLY OF MARINE FUELS
Bunker Holding aims to be able to provide a 1 stop shop
for all our customers’ future fuel requirements, simplifying their fuel procurement process

Developing Developing a Future fleets are likely to have Leveraging existing

partnerships and network of supply diverse fuel requirements physical operations
strategic relationships with industry leading partners across
with key producers of biofuels, LNG, methanol and ammonia
Some future fuel choices may
green fuels result in reduced vessel autonomy,
requiring more bunkering
operations in more ports

51
LEVERAGING OUR EXISTING CAPABILITIES

Track
Credit
record
$3.2bn 5 year Trading profitably since
1980
Known and
committed trusted
Sustainability Helping green fuel brands
linked producers to
Supported by aggregate Managing
demand
15 international
banks
last mile supply
and complex operations

52
RECENT KEY ACTIVITIES
Short-term Long-term Fuels &
New Fuels Partnerships

ISCC registrations Knowledge partnerships

• Completed ISCC registrations across the Group • Bunker Holding has become an official partner of
with the objective to increase our engagement with zero-
Onboarding of Bio-suppliers, able to deliver 70+ ports emission fuel projects
• Strategic agreement to further develop the US and EU marine • Mission ambassador in
markets for bio-based diesel
• 20+ partnerships in pipeline
• 35+ biofuels deliveries since September 2022 Negotiating strategic partnerships with producers
• Negotiating several strategic partnerships and offtake
First term contract for biofuels with customer in USA agreements with leading producers of methanol and ammonia.
• Successfully secured the first term contract for Renewable • YARA partnership announcement
Diesel in USA

Supply Agreement on LNG Investing in physical capabilities

• BHG is now set up to supply LNG in Europe, Malaysia, • Bunker One has taken a new barge on T/C in Q2 2023 which is
Singapore and Florida able to bunker green methanol
• 4 LNG deliveries since December 2022

53
THE END