Working together for a safer world

New fuels New ships & Infrastructure, 3 years to 2020

Gianpaolo Dalla Vedova Operation Manager Italy, Malta and Adriatics Marine & Offshore

Ship2Shore, IRI and Parthenope University

of Naples Armatori nel 2017: sfide e opportunità

Forces Driving Change

Policies Technology Societal Needs

Regulatory Highlights

IMO MSC 94– All Low Flashpoint fuels under IGF, Fuel Cells, Hydrogen guidelines

IMO MEPC 70

-Global Sulphur Cap 2020

-Roadmap to Decarbonisation 2023

-EEDI 3 and….4

EU Emissions Trading Scheme in Shipping

California’s At- Berth Regulation 2017

China to apply a nationwide Emissions Trading

scheme by 2017

………..

SOx Challenge – 2020

Estimated economic impact from 6 to 50 Billion $ per year

Refineries the X Factor, Distillates or LSFO

Availability of HSFO ( Scrubbers) alternative fuels

Low SF Crude could prove a myth

Hydrogen and Desulphurisation

The processes required are high pressure, high temperature and consume huge volumes of hydrogen which must also be manufactured (releasing

further CO2). The capital cost is massive, operating costs are much higher and lead times for construction are in excess of five years.”

(Source: http://www.ukpia.com/industry_issues/fuels/marine-fuel.aspx)

The Decarbonisation Challenge

COP21 stabilising temperature below 2deg C and aiming for 1.5deg C

IMO work Technical Operational and Market based Measures

The EEDI example, ECO Ships

Carbon Premium 2023– EU ETS– Reg.(EU) 2015/757

LNG offering a 25% saving in Carbon same applies to Methanol

Offsetting and Renewables / Hybrid propulsion could be the answer

Scrubbers cannot tackle decarbonisation

LR Carbon Pathways

COP21 target in shipping can be achieved through a pathway moving away from fossil fuels

VLCC Designs

Offsetting, the LED bulb example

Marine vs Non-Marine Type led bulb

Marine Type more expensive by 20-30%

(Mature Market assumption)

Why?

• Type Approval and certification

• Inevitably more Market limitations

• More hostile environment-Higher Spec

Same Investment onshore could return more by 20-30%

Societal Challenges NOx-PM-Noise

EURO VI

90% of the Societal Impact comes from NOx and PMs (US Ports Research)

Marine Engines NOx Emission limits 30-40 times greater than EURO VI (Cars)

Shore Power for Vessels Calling at U.S. Ports: Benefits and Costs -ACS

New Fuels Status quo and scrubbers

60 + LNG fuelled ships

not including LNG carriers

600 + Scrubber installations

6 methanol installations

16 + battery installations

Conventional option

Numbers approximate as of mid - 2016

87,000 + Ships (Excludes Navy fishing…) 58,000 + Ships Cargo international trade

Technology Economics

• Renewables - LR Technology Radar Reaching cost parity with fossil fuels.

Solar Cells -Swanson’s law

• LNG Type C tanks 3,500 $/m3 - 1,500$/m3 in 5 yrs

• Batteries Down 80% in 6 yrs at 227 $/Kwh

Tesla Gigafactory will attain 125$/KWh

Next stop 100$/KWh before 2020

Scrubber Numbers

New Ships

Funding - New tools EIB GSS CEF EFSI

o Connecting Europe Facility (TEN – T)

‘Motorways of the Sea-Cohesion Fund ’

o EFSI – European Fund for Strategic Investment (Juncker Package)

o The EIB Green Shipping Scheme • Particular focus on green investments and sustainable

shipping

Up to 50% of debt financing on new vessels.

• Up to 100% of green components of retrofitting operations.

Projects EU Med– LNG as Fuel

3 Projects 100 Partners 125 million Euro

Poseidon Med II

Roadmap to LNG bunkering operations in East Med

June 2015 – December 2020

~€53M under Connecting Europe Facility

3 member states, 6 ports, 1 LNG terminal

Technical studies for port installations

-environmental, safety, geotechnical, navigational, geotechnical, bathymetric

Basic & detailed designs for vessel retrofits

-Ro-paxes, speed ferries, carriers, escort vessels

Conceptual & detailed designs for vessel new buildings

-Ro-pax ferry, feeder vessel

Adoption of regulatory framework

Financial instruments for investments

elemed

shipping electrification in EastMed

Cold ironing & Electric Bunkering

3 member states, 4 ports (Piraeus, Killini, Limassol, Koper)

All electric Ro-Pax vessel concept

-short-sea shipping route

-hybrid propulsion through battery installation

Societal & environmental benefits

Direct impact to public health

Zero emission and Decarbonisation aspiration met

support of island interconnections & sustainable mobility

1st Cohesion Fund maritime project

1st zero-emission project 1st on-shore power connection East Med

Concluding

Futureproofing cannot be guaranteed

Offsetting can become a key concept for Shipping

Societal Impact likely to drive further measures on NOx , PM and Noise

Alternative Fuels have not reached their potential 2020 will speed up this process

Think about 2020 but also 2023 and 2030

Innovation cannot wait

Everything Changes

Questions?

3 Projects 100 Partners 125 million Euro

It is not easy being

green

Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates. Copyright © Lloyd’s Register South Europe 2017. A member of the Lloyd’s Register group.

Gianpaolo Dalla Vedova Operation Manager Italy Malta and Adriatics Marine & Offshore T +39 3356318347 E gianpaolo.dallavedova@lr.org

Working together for a safer world