25.5.2020 internal only

25.5.2020 INTERNAL ONLY1

© Wärtsilä INTERNAL

SHIPPING1 billon tons CO2 yearly

25 May 20202

© Wärtsilä INTERNAL 5/25/2020

Emissions -8% globally

17 Goals to Transform Our World

© Wärtsilä INTERNAL© Wärtsilä 17.5.20202

WEBINAR PRACTICALITIES

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

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REETTA KAILA

TECHNOLOGY & DEVELOPMENT MANAGER

WÄRTSILÄ

© Wärtsilä INTERNAL 25.5.2020 INTERNAL ONLY6

Reetta Kaila, D.Sc.(Tech)

Technology & Development Manager

Wärtsilä Biogas Solutions

FUTURE FUELS WEBINAR


SUSTAINABLE FUELS ARE NEEDED TO DECARBONISE THE SHIPPING INDUSTRY

BUT there are business risks that must be considered:

IMPACT ON VESSEL

STRUCTURE

INCREASED

CAPEX AND OPEX

FUEL

AVAILABILITYINCREASED

COMPLEXITY

SHIPYARD

CAPACITY

→ Investing in flexible fuel solutions mitigates the business risks associated with future fuels.

© Wärtsilä

DEVELOPMENT FOR FUTURE FUELS CONTINUES


Green Methanol

A methanol conversion package for the

engine is required.

MeOH

Verified: 2015 Indicative: 2020, Verified*: 2022

Green Ammonia

Combustion concepts to maximise engine

performance and related safety

technologies are currently being

investigated

NH3

Indicative: 2020, Verified*: 2025

Green Hydrogen

Our gas engines are already able to blend

LNG with up to 20% hydrogen, and

combustion concepts have made for 100%

hydrogen.

H2

Verified: 2003

Bio- or Synthetic methane

Can readily be used in liquid form

with equipment made for LNG.

CH4

Cryogenic LNG operations

are well-known (IGF code)

Non-pressurised tanks. Toxic but non-cryogenic. Storage of LH2 at -253 C is a challenge


Otto cycle

Diesel cycle

Diesel cycle

Ammonia


Methanol

Die

se

l engin

eD

ua

l-fu

el

en

gin

e

Diesel

Ammonia

Methanol

Diesel

Synthetic LNG*,**

Ammonia

LNG*

Synthetic fuels available - engine conversionBiofuels available

* Option to blend LNG with 25% (vol) H2

** Synthetic refers to a fuel produced

using Hydrogen as feedstock

THE COMBUSTION ENGINE CAN BE DECARBONISED

USING LIQUID AND/OR GASEOUS FUELS

Conversion to a DF engine increases fuel flexibility

Biodiesel (FAME or HVO)

Biodiesel (FAME or HVO)

BioLNG**


WE WILL HAVE FUEL-STORAGE-AND-SUPPLY SYSTEMS (FGSS)

FOR MOST FUTURE FUELS

Fuel PAC Diesel LPG LNG FAME/

HVO*

Synthetic/

Biomethane

Hydrogen Ammonia Methanol

LNGPac

Stainless steel

vacuum insulation• • • • •

LNGPac

Ni9 Polyurethane

insulation• • •

LH2Pac •

NH3Pac •

Ready solution

Development needed

Minor development needed

•••

* FAME, HVO = Biodiesel

** Tanks can be used as a complement, if already installed

** **


0

0.5

1

1.5

2

2.5

3

Diesel LNG ammonia Hydrogen (cryo) Methanol

Volumetric energy storage ratio compared to LNG

25.5.2020

FUEL VOLUMETRIC ENERGY DENSITY HAS A SIGNIFICANT EFFECT ON VESSEL STRUCTURE OR RANGE

Synthetic Power-to-X fuels

© Wärtsilä INTERNAL 14 May 2019

DNV: MARITIME Forecast to 2050

MARINE FUELS IN THE PAST, TODAY AND THE FUTURE

THE TRANSITION FROM

COAL TO HFO TOOK 30 YEARS

Power-to-X

• Hydrogen (H2)

• Ammonia (NH3)

• Methanol (CH3-OH)

• Methane (CH4) (LSM)

Biofuels

• Liquid biofuels (HVO, FAME, Crude biofuels(soya, rapeseed, palm oils, fish fat)

• Biogas (biomethane, LBM)

FUEL ALTERNATIVES

Fossil fuelsHFO, MGO, LNG, LPG

To fulfil the emission legislation within shipping, additional technologies have to be deployed• Scrubbers ( SOx)

• SCR (NOx)

• Carbon Capture – not yet available


GLOBAL BUNKER FUEL DEMAND (330 MTON/A) VS BIOFUEL SUPPLY TO THE TRANSPORTATION SECTOR

Synthetic fuels (Power-to-X)

FAME & HVO

are part of committed

and legislated biofuel mixing

into road transportation fuels

in various territories (eg. EU

& US)


TRANSITION FUELS WILL BE NEEDED TO COPE

WITH THE LACK OF GREEN FUELS

Limited shipyard capacity is a risk factor

GREEN FUEL

A synthetic fuel produced only with

renewable energy or a fuel produced from

sustainable biomass

2050Today

Available shipyard capacity

Needed capacity

ENSURES FUEL FLEXIBILITY

AND IS A FUTURE-PROOF

SOLUTION TO 2030

DUAL-FUEL

COMBUSTION

ENGINE

LNG FUEL

GAS SUPPLY

SYSTEM

BRINGS YOU

EASILY TO 2050

WITHOUT ANY ADAPTIONS ON YOUR ENGINE ARRANGEMENT

BLENDING

BIO/SYNTHETIC LNG OR H2


THINA MARGRETHE SALTVEDT

SENIOR ADVISOR SUSTAINABLE FINANCE

NORDEA

Confidential

17 •

Green Finance and the Shipping Sector

Thina Margrethe Saltvedt (Ph. D.), Chief Analyst, Nordea Group Sustainable Finance, May 2020

Confidential

18 NORDEA ENABLES TRANSITION TOWARDS A SUSTAINABLE FUTURE

Banks tighten grip on emissions, climate and sustainability:

Poseidon principles and Responsible Ship Recycling Standards

Source: Financial Times, DNV GL, The Maritime Executive

https://collab-vpn.oneadr.net/sites/markets-design/Gallery/Interim_images/Other/nm-other-1920x1080-20.jpg

Confidential

Banks need to implement new climate measures and standards

Confidential

20

E S GENVIRONMENT• Climate Change

• Natural Capital

• Pollution &

Waste

• Environmental

Opportunities

SOCIAL• Human Capital

• Product Liability

• Stakeholder

Opposition

• Social

Opportunities

GOVERNANCE• Corporate

Governance

• Corporate

Behaviour

Confidential

21

Confidential


Poseidon Principles have implications for signatories and clients

Confidential

23

The pricing of climate risk (or sustainability risk) and opportunities will have a

growing impact on the access to capital and the price of capital going forward.

A low climate alignment may result in:

Confidential

24Source: Financial Times

Confidential

25

A sharp growth in Green and Sustainable Debt

Issued in USD bn by Instrument type

Source: Bloomberg NEF

Confidential


Source: World Maritime News

Confidential

The Norwegian Shipowners’ Association launched new

ambitious climate goals 18 May 2020

Can serve as an inspiration for the rest of the industry

27

Emissions from the

Norwegian fleet will

be halved by 2030.

By 2050, the fleet

will be carbon

neutral

Only purchase

ships that do not

emit emissions by

2030.Source: The Norwegian Shipowners’ Association

Thank you!

Nordea Markets is the commercial name for Nordea’s international capital markets operation.

The information provided herein is intended for background information only and for the sole use of the intended

recipient. The views and other information provided herein are the current views of Nordea Markets as of the date

of this document and are subject to change without notice. This notice is not an exhaustive description of the

described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the

judgement of the recipient.

The information provided herein is not intended to constitute and does not constitute investment advice nor is the

information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information

contained herein has no regard to the specific investment objectives, the financial situation or particular needs of

any particular recipient. Relevant and specific professional advice should always be obtained before making any

investment or credit decision. It is important to note that past performance is not indicative of future results.

Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters

in any jurisdiction.

This document may not be reproduced, distributed or published for any purpose without the prior written consent

from Nordea Markets.

Chief Analyst

Thina Margrethe Saltvedt (Ph. D.)

[email protected]

Mobile : +4790634075

Twitter: @ThinaSaltvedt

mailto:[email protected]


1. There is no one single future fuel –a variety of fuels will be in use

2. Investing in fuel flexibility and the combustion engine will mitigate

compliance and business risks introduced by future fuels

3. Wärtsilä will continue to be a supplier of complete systems, regardless

of the fuel

4. Total need for collaboration and partnerships

29

KEY TAKEAWAYS

25.5.2020 INTERNAL ONLY


Q&A

THINA MARGRETHE SALTVEDT

SENIOR ADVISOR SUSTAINABLE FINANCE

NORDEA

REETTA KAILA

TECHNOLOGY & DEVELOPMENT MANAGER

WÄRTSILÄ

25.5.2020INTERNAL ONLY31

25.5.2020 internal only

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