Study on future fuels for cargo vessels in the Baltic Sea Laiva 2025 Study on future fuels for cargo vessels in the Baltic Sea Nasif Rahman Laiva 2025 Espoo, 29.08.2013

Objectives To analyze four non-conventional fuels considering Heavy Fuel Oil (HFO) and Marine Gas Oil (MGO) combination as baseline properties Fossil fuels Liquefied natural gas (LNG) Liquefied petroleum gas (LPG) Biofuels Biodiesel (B100) Bioethanol (E85) Marine Gas Oil (MGO) as main fuel To analyze the ability of these fuels to fulfill future (2025) environmental regulations on air emissions To carry out a cost analysis based on the net present value (NPV) calculations of a case ship with the five fuel options Laiva 2025

Major Upcoming regulations 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 NOx Tier II 2,5 g/KWh below Tier I (14.4 g/KWh for slow speed engines) Tier III 80% reduction from Tier I (3.4 g/KWh for slow speed engines),regionally in the ECAs SOx SECA Effective from 1 July, 2010 1,00% m/m 0,1 % m/m Global Prior 4,5% m/m 3,5% m/m Review 0,5% m/m EEDI Phase 0 (ref. line) 2-20 gCO2 per ton.nm for dwt 40000-2000 Phase 1 10% reduction from Phase 0 Phase 2 20% reduction from Phase 0 Phase 3 - 30% Laiva 2025

Air emission assessment model (AEAM) Engine RPM DWT variation (tons) All types Bulk carriers <130 130-2000 >2000 10000-20000 >20000 NOx IMO Tier I IMO Tier II 1 IMO Tier III 2 CO2 EEDI Phase 0 EEDI Phase 1 EEDI Phase 2 EEDI Phase 3 3 Sulphur content SECA Before 1 July 2010 Between 1 July 2010 and 1 Jan 2015 After 1 Jan 2015 PM Sulphates -2 to +2 Nitrates VOC from HC Heavy metal Soot NH3 Methane CO HC Ship specific emmisions CFCs 19-May-05 HCFCs 1-Jan-20 Total Laiva 2025

Case study: m/s Eira Dimensions Ice Class IA Super: Baseline case Length overall 157 m Length BPP 148 m Breadth 24.6 m Depth 13 m Draft s.w 9.03 m Deadweight 19625 tons Lightweight 6428 tons Main Engine 7860 KW 129 rpm Auxiliary Engine (3 nos) 840 KW each, 1000 rpm Ice Class IA Super: Baseline case 14 nautical mile per hour (knots) 75% maximum continuous rating (MCR) of the engines Ice Class IA 14 knots Ice Class IA Super slow steaming: 11 nautical mile per hour (knots) 50% maximum continuous rating (MCR) of the engines Source: ESL Shipping Oy Laiva 2025

Energy Efficiency Design Index (EEDI) calculation for different fuels Laiva 2025 Energy Efficiency Design Index (EEDI) calculation for different fuels EEDI = 𝐶𝑂 2 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑡𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡 𝑤𝑜𝑟𝑘 The calculated EEDI is a theoretical measure of the CO2 mass emitted per unit of transport work (grams CO2 per ton nautical mile) for a particular ship design Variation in carbon content and specific fuel consumption of fuels Variation in engine’s power requirement for different Ice Class Laiva 2025

Energy Efficiency Design Index (EEDI) results Laiva 2025 Energy Efficiency Design Index (EEDI) results Fuels Ice Class IA Super Ice Class IA Ice Class IA Super Slow speed HFO+MGO 4.06% below Phase 1 4.2% below Phase 1 4.2% over Phase 2 LNG 9.1% over Phase 2 8.9% over Phase 2 14.73% over Phase 3 LPG 7.6% over phase 1 7.3% over phase 1 3.2% over Phase 3 Biodiesel 25.4% below Phase 1 25.7% below Phase 1 1.7% below Phase 1 Bioethanol 1.4% below Phase 1 8.6% over Phase 2 MGO 7.4% below Phase 1 7.6% below Phase 1 1.3% over Phase 2 Phase 0: starts from 2013 Phase 1: starts from 2015 Phase 2: starts from 2020 Phase 3: starts from 2025 Laiva 2025

Nitrogen Oxides (NOx) and Sulphur Oxides (SOx) emission results Laiva 2025 Nitrogen Oxides (NOx) and Sulphur Oxides (SOx) emission results All main and auxiliary engines pass Tier III with LNG With LPG and ethanol, the passing limits are Tier II HFO and MGO pass Tier I Biodiesel can only pass Tier I with slow steaming All the studied fuel contain very low sulphur than HFO and MGO, they all can pass SECA 2015 regulation Source: IMO MARPOL annex VI reg. 13 Laiva 2025

Air emission assessment model results Does not show much variations between Ice Class IA Super and Ice Class IA Results are better in slow steaming case LNG and then LPG give best results Laiva 2025

Net present value (NPV) estimation: variables Laiva 2025 Net present value (NPV) estimation: variables Up to 2025, biodiesel as main fuel would be the most expensive After 2025, heavy fuel oil (HFO) as main fuel would be the most expensive Investments cost other than machinery costs have kept constant for both cases Laiva 2025

Net present value (NPV) estimation: Annual fuel cost Laiva 2025 Net present value (NPV) estimation: Annual fuel cost About two third cost with 11 knots speed than 14 knots Ethanol is much cheaper but its consumption is high for same power output As a result, cost with ethanol is similar with LNG and LPG Laiva 2025

Net present value (NPV) estimation Laiva 2025 Net present value (NPV) estimation Slow steaming offers less NPV value for the ship for non-conventional fuels Change in annual income with LNG/LPG for DWT/gross volume loss from 305 cubic meters net volume (119 ton) fuel tanks In case with HFO and MGO, slow steaming provides better NPV because of their high fuel price in the future Laiva 2025

Laiva 2025 Conclusions LNG would be the best fuel option considering air emission properties and cost analysis Small difference in results in case of Ice Class IA Much better results on air emission properties in case of slow steaming Slow steaming must be decided based on cargo flow in the market Whole lifecycle CO2 emission analysis needed for biodiesel Laiva 2025

Future Challenges Cost reduction from less air emissions: Mainly on reduction of NOx and SOx emission Port of Stockholm: up to 23% Port of Mariehamn: up to 24% Port of Rotterdam: up to 10% CO2 trade: the EU scheme The European Union Emission Trading Scheme: Cap and Trade Principal 31 countries involved; 1,000 factories, power stations, and other installations with a net heat excess of 20 MW as of Jan 2013 Shipping not included (near future?) Laiva 2025

Thank you Laiva 2025