Contents 1. International Shipping The point of view from ...

The point of view from Japanese Shipowner

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Tamio KawashimaPrincipal Technical Officer

NYK Line

September 29, 2009

Contents

1. International Shipping

2. Future Ship Design

3. Future Ship Operation

4. Future Infrastructure

5. Potentiality and target of CO2 reduction

6. Future Regulatory Framework

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• The international shipping industry is responsible for the carriage of 90% of world trade and is the lifeblood of the global economy.

• Shipping is the most energy efficient mode of transport.

1. International Shipping (1) the most efficient mode

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Crude oil

Road

RoRo/Vehicle

Bulk carrierLNG

Container

Rail

0 50 100 150 200 250 300g CO2 / ton*km

Source : IMO MEPC58/INF. 6 IMO GHG Study

Typical ranges of ship CO2 efficiencies compared to rail and road

However・・・

• CO2 emission from the international shipping amounted to 847 million ton or 2.7% of global CO2 emission in 2007.

• According to the growth of world trade, the international shipping will have greater impact on global warming.

Others73.0%

Internationalshipping

2.7%

Domesticshipping

0.6%

Internationalaviation

1.9%

Rail0.5%

Road21.3%

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Global CO2 emission

Source : IMO MEPC58/INF.6 IMO GHG Study

1. International Shipping (2) impact on global warming

• Presence of Non-Annex 1 countriesOne of characteristics of the international shipping is great presence of Non-Annex 1 countries now, and increasing.

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1. International Shipping (3) Non-Annex 1 countries

ToFrom

N America E Asia Europe S America M East India Africa Oceania Total

N America 0.85 2.54 1.03 4.01 5.01 4.32 6.03 0.92 2.58

E Asia 3.57 10.70 4.35 16.92 21.14 18.22 25.44 3.86 7.98

Europe 0.88 2.64 1.07 4.17 5.21 4.49 6.27 0.95 2.96

S America 4.61 13.80 5.61 21.82 27.26 23.51 32.82 4.98 10.24

M East 4.63 13.87 5.64 21.94 27.40 23.62 32.98 5.01 14.28

India 5.21 15.59 6.34 24.66 30.81 26.56 37.08 5.63 13.72

Africa 7.23 21.65 8.81 34.24 42.78 36.88 51.49 7.82 22.24

Oceania 1.09 3.26 1.33 5.16 6.45 5.56 7.76 1.18 2.64

Total 3.27 7.69 4.17 11.21 15.65 14.45 19.79 2.69 7.18

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• OPRF* undertook a major study where transport demand in ton-miles by ship types is projected towards 2050 on the IPCC A1B scenario**.

• Container movement in 2050 was estimated 7 times as much as in 2005.

Source : OPRF* = Ocean Policy Research Foundation, Japan (2008)** IPCC : Intergovernmental Panel of Climate Change A1B scenario : High growth scenario, balance of fossil/non-fossil energy

Ton-mile index of container movement on A1B 2050 scenario (2005=1)

1. International Shipping (4) Transport Demand in 2050

• CO2 emission from the international shipping in 2050 is estimated 4,817 million ton on A1B scenario, and 2,957 mill ton on B2 scenario*, if no improvement of ships efficiency.

• It is of great importance for the international shipping to challenge the reduction of CO2 emission.

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4,817 million ton

2,957 million ton

CO2 (million ton)

847 Mt

A1Bwith no efficiency

improvementof ships

B2with no efficiency

improvementof ships

2007 20500

1000

2000

3000

4000

5000

0

1000

2000

3000

4000

5000

2007 2050

847 Mt

CO2 (million ton)

Emission curves (if no efficiency improvement of ships)

Sources : IMO MEPC59/4/35 submitted by Japan * B2 scenario : Regional integration scenario

1. International Shipping (5) Emission Curves Contents







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• In order to reduce the exhaust gas emission at port, land electric power is used with connecting a cable to ship power system.

• It is called as “AMP (Alternative Marine Power) system” or “Cold Ironing”.• Now, more than ten container vessels of NYK are equipped with this

system.

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Supply Power from Land Side

No Engine Operation

Reduce CO2 Emission

2. Future Ship Design (1) Utilization of Land Electricity

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Mobile Container Type Fixed Type

2. Future Ship Design (1) Utilization of Land Electricity

Wiring Diagram

• 6200 units PCTC MV Auriga Leader, delivered in December 2008, isequipped with 328 solar panels that generate 40kW. The solar power system connects to ship propulsion system.

• The system supplies up to 6.5% of the electricity used on board, and CO2 emission from the vessel is expected to be reduced by 0.3%.

• Now testing the durability under stress from salt water and wind pressure for future full-scale implementation.

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MV Auriga Leader

Solar panelsSolar panels

2. Future Ship Design (2) Solar Power

• Air causes less friction than water by reducing the contact surface between the water and the ship’s hull.

• Air lubrication system will be installed on new ships of NYK-Hinode Line, shallow draft with wide flat bottom, delivered in 2010 at Mitsubishi Heavy Industries, Japan.

• Actual power saving, after deduction of the power consumption needed to utilize the system, will be about 10%.

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2. Future Ship Design (3) Air Lubrication

in future

• Ship is surrounded by many natural clean energies.Solar power, Wind power, Wave power, Biomass power

• These Clean energies will be utilized for ship power source. • Fuel Cell and New Type Battery will be installed on ships.

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2. Future Ship Design (4) Clean Energy

1st STEP - Year 2010* Solar power panel → Electricity (500KW)

→ Stored in Battery → used for ship power system

2nd STEP - Year 2020* added Wind/Wave power generation → Electricity (+500KW)* Diesel / Fuel Cell Hybrid propulsion

3rd STEP - Year 2050* Solar/Wind /Wave power generation → Electricity (5,000KW)* Fuel Cell / Battery hybrid electric propulsion

Hybrid Plug-in Fuel-cellCarCar

2010

2020

Main Engine

DieselDieselDieselDieselDiesel

VentilationShip service

Thruster

2050

Motor

Diesel Engine

Hybrid (1)

DieselDieselDieselDiesel

Motor Fuel Cell

DieselEngine

DieselDieselBattery

Hybrid (2)

MotorFuel Cell

Motor

Fuel Cell

Fuel Cell

Battery

H2

Solar

Zero Emission

Battery

Methanolor LNG

SolarWindFromShore

Solar

Solar

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2009

Bio Fuels

2. Future Ship Design (4) Clean Energy

• NYK Super Eco Ship 2030 was defined to be the benchmark for evaluating the technical advantages to be implemented towards 2030.

• The project was carried out byNYK Line / MTI, JapanElomatic Marine, FinlandGarroni Design, Italy

• Purpose of the project is to propose the shipping industries what is needed to develop technologically in the long term including alternative energy.

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2. Future Ship Design (5) NYK Super Eco Ship 2030

• 20% of displacement can be reduced byusing aluminum alloys, composites and sandwich structures,no ballast as a result of optimizing main dimensions and stability

• The total power required can be reduced by 9–12%.

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• Reduce the Lightweight

• Recent research shows that the bio-fouling causes up to a 15% increase in ship resistance.

• It is effective to find the solutions to prevent the fouling with surfaces that use nanotechnology, shark’s skin, etc.

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Shark’s SkinNanotechnology


• Reduce Skin Friction• The container cover area and sails which can be used as solar cells

base is 31,000m2.• The solar cells are of thin film cells. • Dairy average output will be 1-2 MW on the basis of 30% conversion

factor in 2030.

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• Solar Power

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• The vessel is equipped with 8 foil sails. Each sail is about 500 m2.• The sails can be taken down by means of a telescopic system.• The power saving by sail propulsion can be 1-3 MW.

Sails stored


• Sails

Sails location

• One of the most promising concepts is the use of fuel cells for main power generation.

• Total required power of fuel cells is around 40 MW for NYK Super Eco Ship 2030 with capacity of 8,000 TEU whereas today’s ship needs 64 MW.

• Fuel cells of NYK Super Eco Ship 2030 is LNG based.• When the technology of hydrogen fuel cells become applicable to ships,

expected around 2050, CO2 emission from ships can be zero.

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• Fuel Cell

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Total power requiredRenewable energy (2～5MW in 2030)

64MW

Total power required

40MW

2010 2020 2030 2040 2050Diesel Engine Fuel Cell

100%

0%

31%

CO

2 Emission

Fuel Oil Methanol LNG H2


• Roadmap of Fuel Cell Technology

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FuelCell

FuelCell

WasteHeat

Recovery

Motor Motor

PowerManagement

System FuelCell

LNGTank

SolarPanel

BatteryWind Sail


• Power Generation Plant

<8,000TEU Class/25 knots>

Today’s Ship NYK SES 2030Length 338m 353mWidth 45.8m 54.6mDesign Draft 13.0m 11.5mRequired Power Diesel Engine (HFO) Fuel Cell (LNG)

64MW 40MW

Renewable Energy None Solar : 1-2MW

None Wind : 1-3MWCO2 Emission 195g/TEU-mile 62g/TEU-mile

(100) (31)

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• Comparison

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Weight savings 9 %

Solar power 2 %

Hull friction10 %

Hull form optimization 2 %

Wind resistance 1 %

Propulsion efficiency 5 %

Superconductivity 2 %

Wind power4 %

Fuel cells32 %

Reduced power for ship use 2 %

CO2 emission cuts of 69%CO2 emission cuts of 69%


• Summary of Emission Savings

• MOL Completes Concept for Series of New-Generation Vessels• First Announcement is “ISHIN-I Car Carrier” on September 10, 2009• She will be realized within 5years.

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2. Future Ship Design (6) ISHIN-I by MOL

Source : http://www.mol.co.jp/pr-e/2009/e-pr-2780.html

Contents







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27

CO2 e

miss

ion

per t

on-m

ile

• 10% speed reduction cuts 20% in fuel consumption and CO2 emission.• The figure (below) shows actual trend of the efficiency improvement of

NYK car carrier before/after the speed reduction has been implemented.

Energy Efficiency of NYK Car Carrier

EEOI*=96.7 EEOI=87.3

EEOI :Energy Efficiency Operational Indicator.Amount (g) of CO2 emission

when 1 ton of cargo is transported for 1 mile.

3. Future Ship Operation (1) Speed Optimization

Voyage

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• Kuroshio Current is one of the world’s two major ocean currents and is known for its high speeds.

• Navigation on Kuroshio Current based on the detailed forecast can cut maximum 9% in CO2 emission for NYK crude oil tankers.

Source : Forecast Ocean Plus

Japan

China

Kuroshio Current

3. Future Ship Operation (2) Kuroshio Current

• Electric consumption of major equipment, lighting system, A/C system etc. are measured and analyzed in view of grasping the actual load, peak and average load with working hours. “Visualization” of real power usage gives so many ideas to save energy.

• By using those data, following will be done.- Optimum power management considering min. CO2 generation- Inverter motor is adopted to large pumps, equipment consideringactual working condition for saving the electric power.

- LED lighting system is adopted for big lighting system such as PCTChold lighting.

- Others

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3. Future Ship Operation (3) Monitoring / Visualization

• Electric power consumption monitoring• Fuel consumption of ship is measured for analysis. “Visualization” of

actual fuel consumption gives so many ideas to save energy.

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<Screen image>


• Fuel consumption monitoring

FUELNAVI (fuel economy indicator for vessel)• “Visualization” of FOC index

(mile/ton, ton/mile, CO2 ton/mile) for captain/crews

• Show real time data, trend and average data

• Analyze effect of current, wind, wave, drift, rudder action and etc.

• Improve awareness about vessel performance

Automatically output summary dataRed : Ground SpeedBlack: Speed through Water

Trend Image of Average Vessel Speed per Hour

• Analyzing optimum trim onboard by using detail time trend.• Select best auto pilot setting by comparing FOC index.

• Combine with weather routing by actual sea margin analysis.

• Eco navigation by setting criteria FOC index (mile/ton or ton/mile).

Red line : OG speedBlue line : Rudder angleFOC index (Mile/Ton) was getting lower at a constant rpm with the autopilot.OG speed was getting a little slower because there was beam wind and counter rudder angle was about 3 degrees. Resistance by rudder was the cause of performance down.

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• Fuel consumption monitoring

Visualization

⇒ Optimization of

ship operation

⇒ Fleet control

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• “Visualization” support not only “Optimization of Ship Operation” but also “Fleet Control”.

3. Future Ship Operation (4) Fleet Control

・・・・・・・・・

Performance Monitoring

Operating Data

ＬＲＩＴSpeed-Limit.

Control CenterPort

Reservation

Port Authority

Berth 1 Berth 2

New Services/Systemsunder New Concepts

Social / Community

Efficiency Improvement

World-wide service for all ship Owners/Operators• Auto surveillance network for Speed-Limitation• No waiting in port with Port Reservation Service• Each ship with sensors makes useful data 33

Satellite

Tide Data Service ＡＩＳ

Whether Routing Service

Port Control System

GovernmentOperation Center of

Owner/Operator

3. Future Ship Operation (5) World-wide service Contents







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• Many kinds of new Infrastructures will be required in future, so it is important to consider 5W (who, what, when, where, why, how).• Reconstruct ports, berths, channels and rules for mega-size vessels.• Renew land electric power system in port for “AMP (Alternative Marine

Power) system”. • Construct “Supply Chain of LNG/H2” including “service stations in port”

for Fuel Cell ships• CO2 Receiving facilities for ships’ CCS

(Carbon Dioxide Capture and Storage)

• Global rules for Carbon Footprint • How to calculate Carbon Footprint

of seaborne trade.• How to verify? Who will verify?

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4. Future Infrastructure Contents







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Potential Improvement of Efficiency• Japan conducted detailed case studies on the estimation of the

efficiency improvement of new ships including the utilization of new technologies.

• There remains many existingships which are less efficient.

• The estimated CO2 emissionfrom the international shippingis …

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Delivery 2015-2019 2020-2024 2025-2029 2030-2034 2035-2039

Bulker 25% 40% 45% 50% 50%

Tanker 35% 40% 55% 55% 55%

VLCC 40% 50% 60% 60% 60%

Container 35% 45% 55% 65% 70%

Source : IMO MEPC59/4/35 submitted by Japan NYK Super Eco Ship 2030

0

20

40

60

80

100

1 4 7 10 13 16 19 22 25 28 31Age of Container 8,000TEU+

Remaining Ratio (%)

It takes time to replaceexisting vessels by

new ships


Considerable emission reduction can be possible compared with business as usual.

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Source : IMO MEPC59/4/35 submitted by Japan

Estimated CO2 emission curves based on different growth scenarios

2,363 mill ton

▲2,453 Mt (▲49%)

0

1000

2000

3000

4000

5000CO2 (million ton)

Business as usual

With reduction measures

847 Mt

4,817 mill ton

▲1,471 Mt (▲50%)

0

1000

2000

3000

4000

5000

847 MtBusiness as usual

With reduction measures

2,957 mill ton

1,486 mill ton

2007 2050

2007 2050

A1B Scenario

B2 Scenario


Potential Emission Reduction

1990 level

Business

as usual

0

1000

2000

3000

4000

5000CO2 (million ton)

2007 2050

A1B Scenario

847 MtWith reduction measures

2,363 mill ton

49% efficiency improvement

4,817 mill ton

468 mill ton = Cap proposed by ECBuying emission credits

• No matter what you achieved utmost improvement of ships efficiency, shipping companies still have to buy emission credits from other sectors.

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Estimated CO2 emission curves and Capping proposed by EC

No money left to improve ship efficiency !!!


Capping proposed by EC

Contents







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• IMO MEPC (Marine Environment Protection Committee) agreed :

1. a package of technical and operational measures, i.e.a. formula of Energy Efficiency Design Index for new shipsb. guidance of Ship Energy Efficiency Management Plan for

voluntary use to monitor and improve performance.

2. a work plan for further consideration of market-based measuresa. Various proposals

Emission trading scheme, Bunker levy, ...

What kind of market-based measures are appropriatefor the international shipping ?

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• Market-based Measures • Reduction of CO2 emission from the international shipping

Reduction of activitiesImprovement of ships efficiency

⇒ Improvement of ships efficiency should be a primary option

• Purchasing emission credits from other sectors⇒ Is it an appropriate solution ?

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purchase credits from

other sectors ?

invest in building energy efficient ships ?

How to spend our

revenues to reduce CO2 emission ・・

・


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• A simple simulation to compare “purchasing emission credits” and “Improving ships efficiency”.• A shipping company will order a new vessel in 2015.• Assume that the price of a saving-energy equipment will be twice of the

price of emission credit in 2015.It is too hard for the company to install the equipment onboard.

• However, if the price of emission credit will increase year by year...

• The new vessel will be delivered in 2017.• During several years,

the company will be verysatisfied because emissioncredit is cheap enough.

• However, after several years,the situation will be changed.

• The life of the vessel is 25 years or more. As the result, total life cycle cost of “purchasing emission credits” will become bigger than one of “Improving ships efficiency”.

• Even if “Emission Credit” is one of good market-based measures, it is not perfect from the view point of this result.

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＞

Refund Scheme proposed by The Japanese Shipowners Association

• GHG contributions are collected from each vessel, based on the purchased volume of marine bunker, and transferred to the Maritime GHG Fund.

• Majority of the collected contributions are refunded to vessels that have improved energy efficiency. The refund creates strong incentives to encourage shipping companies to improve ships efficiency.

• A part of the contributions is allocated to finance R&D of new technology and mitigation and adaptation projects in developing countries.

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☺ ☹Other use：

・ R&D of new technology・ Mitigation & adaptation projects

Maritime GHG FundA vessel B vessel C vessel

strong incentives

Collection：

Refund:

6. Future Regulatory Framework Closing RemarksThe shipping is the most environment-friendly mode of transportation.

Trend of CO2 emission from the international shipping is determined by the growth of global economy.

Imposing emission capping is not appropriate approach.

There is high potential of the efficiency improvement of the international shipping.

Regulatory framework should beeffectively established to providestrong incentives for the shippingindustries to invest in theefficiency improvement of theinternational shipping.

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Investin building

energy efficient ships

purchase credits from other

sectors

Thank you for your attention

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