1 EIBI conference Brussels June 5, 2012 Biofuels chains in the maritime sector including inland navigation, short sea, ferries, dedicated vessels and other applications. Peter van der Gaag Holland Innovation Team

2 Bunker fuels, what happens with business as usual The shipping sector uses millions of tons bunker fuels each year. Shipping accounts for 2.7 % of all the CO 2 emitted by human activity on earth. It uses predominantly HFO. As residue of oil refineries, HFO contains high % sulfur. Minimum specs are sometimes not fulfilled due to contaminate with waste.) In 2020 NOx and SOx from shipping will exceed all land sources. IMO does not allow high sulfur content in low emission areas and ports (ECA, emission control area), so ships cannot use HFO here. Interest is growing in LNG and bio-fuels as ship fuels, this comparison of emissions shows why: EIBI conference Brussels June 5, 2012

3 Emission of LNG and Bio-Diesel (ref: fossil diesel) LNG is clean but is still a fossil fuel, brought to Europe from far over the oceans. Bio-diesel and bio-ethanol are renewable but are under fire because of competition with food production. EIBI conference Brussels June 5, 2012

4 The December 2011 Ecofys report commisioned by EMSA discusses biodiesel, DME, BTL, bio-ethanol and bio-methane, amongst others : “ There is a market for biofuels to be introduced in ships based on current policy and support schemes, high operational costs and environmental benefits. It is technically possible to replace marine fossil fuels with bio-fuels for use in ship engines. The most relevant parameters limiting the potential of bio-fuels today are: availability, technological development, technical integration, and operational consequences”. (Ecofys 2011) What do we know about bio fuels for shipping? EIBI conference Brussels June 5, 2012

5 In case of spillage / accident, bio-diesel bio-degrades and bio-ethanol and LNG evaporate. Bio-diesel added to HFO can separate from the HFO fuel. Bacterial growth in bio-diesel is possible in fuel tanks. Bio-diesel has high viscosity when very cold. Bio-ethanol especially in high blends attracts water and has low calorific value of 21MJ per liter (HHV), so fuel tanks must be larger for the same amount of energy. This also holds for LNG (which needs even more space because it requires highly insolated tanks to stay cryogenic), besides LNG varies strongly in quality. LNG, when burnt in engines, risks methane slip, i.e. emission of CH 4 which is a stronger greenhouse gas than CO 2. The next slide presents a thorough comparison of carbon footprint between biodiesel, BTL, diesel and LNG by German company Air-LNG GmbH Some facts about biofuels and LNG EIBI conference Brussels June 5, 2012

6 Well to wheel (propellor) CO2 Emissions by Air-LNG Bio-LNG (= liquid biomethane) scores best, even carbon negative EIBI conference Brussels June 5, 2012

7 The l esser known Bio-LNG: what is it? Bio-LNG is produced from biogas. Biogas is produced by anaerobic digestion. All organic waste can rot and can produce biogas, the bacteria do the work. Therefore biogas is the cheapest and cleanest biofuel without competition with food or land use. Bio-LNG (LBM) = liquid bio-methane. For the first time there is a biofuel which has always a better quality than its fossil counterpart LNG, so: besides fossil LNG there is the premium Bio-LNG EIBI conference Brussels June 5, 2012

8 Bio-LNG advantages Bio-LNG production does not compete with food production Bio-LNG does not require blending, BUT CAN Bio-LNG can be produced in your own country Quality of bio-LNG is better than quality of fossil LNG ((i.e. methane number (MN) of pure bio-LNG is always higher than the minimum of MN 85, recommended by Euromot)) Bio-LNG is the cheapest bio-fuel per energy unit Bio-LNG is cleaner than all other liquid fuels Bio-LNG can be used to improve heavy LNG quality Bio-LNG has negative methane slip More about fuel quality and methane number: see  content/uploads/2011/08/Position-paper-LNG-quality-versie- 30june11.pdf EIBI conference Brussels June 5, 2012

9 What about costs of biofuels? “Production costs of bio fuels are still higher than for fossil marine fuels. However, the uncertainty in technological development, scaling and therefore cost reduction could lead to a competitive situation, if marine fuels are to be increasing in price, and if the obligation incentive for bio fuels remains within the RED”. (Ecofys 2011) Comparison with prices in Rotterdam Port, May 2012 (LHV) Bio-diesel (FAME) Euro/ton = 20 Euro/GigaJoule Bio-ethanol 750 Euro/ton = 28 Euro / GigaJoule Marine Diesel Oil/Marine Gas Oil = 900 dollars/ton = 17 Euro/GigaJoule HFO = 600 dollars/ton = 11.5 Euro /GigaJoule And heavy LNG = dollars/ton (Europe) = Euro/ GigaJoule Expected price bio-LNG: Euro/GigaJoule (estimate Holland Innovation Team), slightly higher than small scale lean LNG EIBI conference Brussels June 5, 2012

10 Methane slip (unburnt methane emissions) If gas is burnt in gas engines, some of the methane is emitted, not burnt Research shows that methane slip is higher for dual fuel engines than for lean burning gas engines and especially for retrofit (refurbishing). Modern four stroke gas engines emit 4-8 gr of CH4 per kWh or %. (Source: Tanker shipping and trade, April/May 2012) So why not mandatory blending of bio-LNG in the same way as bio-diesel in diesel and bio-ethanol in gasoline. After all, bio-LNG is produced from methane slip from rotting biomass, it combats methane slip from fossil LNG and besides blending of bio-LNG in LNG improves overall fuel quality. EU is advised to recommend and support production of bio-LNG and incorporation of bio-LNG into RED. EIBI conference Brussels June 5, 2012

11 Inland and short sea shipping becomes ‘green’ by Bio-LNG E-Energy Market by Erik Groen – 21th of september 2011 “LNG (Liquefied Natural Gas) is cleaner than gasoline, diesel and fuel oil. "But it's still a fossil fuel", says Peter van der Gaag. Bio-LNG is truly "green gas". "The bio-LNG must be transported between production locations and distribution centers," Van der Gaag. "We have to create a whole chain. A economic bio-LNG plant would produce between tons of bio-LNG daily. Distribution can be done by bio-LNG tankers of cbm.” Good news for the Community of European Shipyards' Associations (CESA) and for Europe We estimate the new building market for small scale bio- LNG carriers and small scale LNG carriers (up till tons) at several billions of Euro’s in the years to come. Development of knowledge of small scale liquefaction, cryogenic equipment, special tanks and hoses will give Europe economic growth. ‘ EIBI conference Brussels June 5, 2012

12 Bio-LNG chain: we need small scale LNG carriers There will also will be a new market for (bio) LNG bunkering vessels and carriers for transporting fossil lean LNG from small scale plants and for transport of bio-LNG to bunkering stations and large terminals for blending and thus improving heavy LNG quality. Not only short sea vessels but also ferries are able to sail on Bio-LNG produced from local waste. This is recommended for ferries in wetlands and other environmentally precious areas. EIBI conference Brussels June 5, 2012

13 We need LNG/bio-LNG bunkering stationsls 22 November 'First movers' integral in LNG bunkering future... part of trials to acquire permit for construction of bio-LNG bunkering terminal A grant of the ministry of infrastructure and environment was awarded in November – the ministry gave additional scores to bio-LNG bunkering above LNG bunkering A. Nobel & Zn Bunkerservice EIBI conference Brussels June 5, 2012

Because a large number of power stations are coal-fired, running ships on shore electricity when alongside could result in greater levels of atmospheric pollution than the traditional practice of using ship fuel. Furthermore, installing the necessary berth-side connection points in EU ports could cost EUR 675 million in aggregate and, thereafter, EUR 50 million a year to maintain. Week_46.aspx Week_46.aspx We propose use of bio-LNG for cold ironing The first-ever mobile LNG cold ironing test was conducted with the APL China at the Port of Oakland. PG&E supplied the LNG equipment and technical expertise EIBI conference Brussels June 5, 2012

15 Europe, don’t miss the boat Stop thinking, start acting Support bio-LNG –the biofuel which does not compete with food production Thank you for your attention EIBI conference Brussels June 5, 2012