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©2008 DK GROUP N.A. N.V ALL RIGHTS RESERVED1

DK Group One ship pollutes as much

as 50 million cars


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DisclaimerThis presentation contains forward-looking statements as of the date of such statements. Such forward looking statements involved known and unknown risks, uncertainties and other fars

which may cause the actual results, financial conditions, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Given these uncertainties, any person to whom the current presentation is addressed is cautioned not to place any undue reliance on such forward-looking statements and to review and analyse the same with its legal, financial and economic advisors. Such forward-looking statement therefore do not constitute in any manner an undertaking and/or commitment or guarantee as to the future business of the Company.


“The time of half-measure has passed. We are entering a period of

consequences”

-

Winston Churchill


Presentation overview

1

Shipping's emission

legacy

2

SOx

and NOx

reduction

3 C

O2 reduction

4

The Air Cavity System

5

Major

emissions reductions

6

New builds

and new technologies

7

Shipping vs. Aviation

8

Conclusion: Shipping can lead the way

Q&A

Appendix 1: Propeller technology


1. Shipping's emission

legacy

Shipping’s emission legacy


A reality check for shipping

•

In 2007 it was established that the maritime industry accounted for emission of approx. 1,2 billion metric tons of CO2

annually. This is based on the present world wide fleet (1st quarter 2007). This is almost 100% higher than earlier estimates.

•

Latest figures indicates that the shipping industry will be responsible for emitting at least 1.5 billion metric tons of CO2

annually by 2010 and in 2015 the annual emissions will be substantially over 2 billion ton. This is 67% more than today’s emission.

•

On top of these figures the maritime industry will emit 20 million tons of SOx

and 37 million tons of NOx

annually. These emissions will increase just as drastically as CO2

-

emissions.

•

There is a massive new building program underway, and in the next 20-25 years we will have these ships on the oceans. Should they be build without using well known technology?

The Guardian, 13 February 2008



60.000 death’s annually

•

A study published in the American Chemical Society journal Environmental Science and Technology by James Corbett (et al) in November 2007 shows, that

shipping is responsible for 60,000 premature deaths a year.

•

For a long time there has been a perception that because ship emissions are out in the ocean, then they doesn't really affect anyone on land, but as this study shows -

this is clearly false.

•

The report did not take into account additional health impacts such as bronchitis and asthma. It is also estimated the toll of premature deaths in North America, mostly on the West Coast, as numbering

9,000 per year.

•

The report said the 60,000 premature death’s a year were from heart and lung-related cancers. Corbett predicted the number could rise by 40% in the next five years because of an increase in shipping activity.

•

US Lawyers will not wait for long before they act. Ship owners should NOT forget that they are under US law when in port.



Where will these deaths occur?

Corbett, J. J.; Winebrake, J. J.; Green, E. H.; Kasibhatla, P.; Eyring, V.; Lauer, A., Mortality from Ship Emissions: A Global Assessment. Environmental Science & Technology 2007,41, (24), 8512–8518



60% of the world’s bee population is dead

•

It’s not only humans that are dying from the effects of pollution. 60% of the worlds bees are already dead.

•

Commercial beehives pollinate over a third of the worlds crops and that web of nourishment encompasses everything from fruits like peaches, apples, cherries, strawberries and more

•

Without this pollination those crops would be history -

to say nothing of the honey bees produce or the flowers they also fertilize



Ship emissions harms the oceans

•

Cecilie Mauritzen, a senior scientist of the climate division of

Norwegian Meteorological Institute, says emissions from ships that are far

from land cannot be ignored.

•

According to Mauritzen, small particles, or particulate matter, carried in ships' exhaust gases scatter and absorb solar and thermal radiation, indirectly changing cloud properties. ''These aerosols have a cooling effect on the earth, in that they reflect incoming shortwave radiation from the sun,'' Mauritzen told Bunkerworld

on November 8, 2007.

•

The cooling effect might sound positive, given concern about global warning, but Mauritzen said the aerosols were having a damaging impact. The particulate matter carrying aerosols did not reach as far into the atmosphere, and typically rained out after just a day or two, sending the particles into the oceans, she explained.

•

In shipping lanes, she said, ship after ship was emitting the aerosols, contributing to an almost constant presence of particles in the atmosphere close to the lanes. One impact was to increase rainfall in the area of the lanes, which in turn sent larger volume of particles into the oceans.

Cecilie Maurtitzen



Concentration in global shipping lanes

Corbett, J. J.; Winebrake, J. J.; Green, E. H.; Kasibhatla, P.; Eyring, V.; Lauer, A., Mortality from Ship Emissions: A Global Assessment. Environmental Science & Technology 2007,41, (24), 8512–8518

•

In the global shipping lanes ship emissions are contributing to an almost constant presence of particles in the atmosphere close to the lanes


•

Could the early discharge of rainwater over shipping lanes, which Cecilie Mauritzen found, be the cause of the severe draughts seen on land?


Jellyfish population explosion warning

•

Off the Northern Ireland coast a 10 mile wide, 13 meter deep swarm of jellyfish attacked a salmon farm wiping out over £1million worth of stock.

•

Billions of small jellyfish, known as Mauve Stingers, flooded into the cages about a mile into the Irish Sea, off Glenarm

Bay and Cushendun.

•

Swimming bans were imposed at beaches across the Mediterranean because of an influx of stinging jellyfish along coastlines from Spain to Sicily.

•

The Spanish Red Cross has treated 19,000 people for stings in the summer of 2007 on the Costa Brava, almost triple the figure for the previous year.



Soot-infused snow responsible for Arctic warming

•

Researchers at the University of California, Irvine, believe that while the threat of greenhouse emissions exists, soot-

infused or dirty snow also contributes majorly to global warming.

•

According to Charlie Zender, an Associate Professor of Earth System Science at the UCI and co-author of the study, dirty snow contributes to a third or more of Arctic warming.

•

SECA’s

are not enough. Earth could be headed for catastrophic sea level rise in the next few centuries if SOx

& NOx

pollution at sea continue at present levels.



Shipping pollutes as much as 195 billion cars

*Beginning in 1990 the sulphur

in diesel fuel for cars has been steadily and drastically reduced from 5.000 PPM to reach 50 PPM now and a further reduction to 10 PPM (same as 0,001%) in 2009.


In other words; Shipping is by far the biggest transport polluter in the world compared to road-

and air transport.


The hypocrisy of shipping

•

A 20 foot container (1 TEU) shipped from Shanghai to Hamburg emits 37 kilos of sulphur. This is the same as 3.950 cars emit at the same time.

•

A whole ship at 8.000 TEU sailing from from

Shanghai to Hamburg, emits as much sulphur

as 31,6 million cars emits during its 28 days at sea.

•

This means that only 24 of 8.000 TEU containerships emit as much sulphur, as the entire world wide car fleet.



2. SOx

and NOx

reduction

SOx and NOx reduction


Distillates vs. Scrubbers

•

Scrubbers will reduce SOx

by 99% NOx

and particulate matter by 85%. Distillates will reduce SOx

by 80% and particulate matter by 35%.

•

The cost of introducing Distillates is estimated to USD 250 billion or more and it will take 20 years to implement. And where will we make 382 (IMO own conservative figure for 2020) million tons of Distillates? Where is the Refinery capacity to do this?

•

CO2 levels from Refining 382 million tons of Distillates would rise by 20%.•

With sestillates

ship owners will end up paying from 1100 $ or more per ton fuel. Why do this when they can stay at USD 560$ with a scrubber?

•

Using todays

prices the industry is paying USD 200 billion per year for fuel. A switch to destillates

would boost that to USD 400 billion. An extra USD 200 billion per year.

•

Retro-Fitting the existing Commercial Fleet of over 25.000 dwt would take only 5 years and cost approx. USD 50 billion. All wiith

no rise in CO2 levels and no rise in Global fuel prices due to change of fuel.

Why should we pay USD 250 billion for distillates when we can have scrubbing for USD 50 Billion which will cover 99% and take only 5 years to implement as a more effective measure against SO?



A sea water scrubbing system

SWS

HC

Discharge water monitorpH 7.0Oil <0.5ppm

In stack exhaust gas monitoring for NO NO2CO2& SO2……

CCS45t/hr perMW

1 MW Exhaust

Dry gas <80%RH

5% to 10% additional oily waste

Engine Room

Note: 45t/hr is based on 100% scrubbing a 3.5% sulphur fuel Water flow would be less for lower %



3. CO2

reduction

CO2

reduction

Emission reduction measures according to the

IMO BLG report released December 2007


Using technology to reduce emissions

•

Propeller technology–

Contra rotating propellers–

Twin propellers –

twin engines–

Propeller Boss Fin Cap–

High-effeciency

propellers•

Heat recovery system•

Block co-efficient.•

Air Cavity System -

reducing the friction resistance of the hull.

•

Other design modifications.

CO2

reduction

ContainershipsTanker vessels

Bulk carriers Gas vessels

VLCC

VLBC

10,000 TEU+

LNG

Suezmax

Aframax

Panamax

Handymax

Panamax

HandymaxCapesize LPG

8,000 TEU

7,000 TEU

5,500 TEU

3,500 TEU

1,700 TEUUSD

120m

USD 95m

USD 215m

USD 150m+

USD 60m+ USD 110m+

USD 60m

USD 90m+

USD 30m+

USD 45m+ USD 40m+


Propeller technology

Reduces fuel burn by 5% to 10%

Twin-propellers –

twin engines Contra Rotating Propellers

10 % improvement depending on relation between main engine and thruster

Fuel saving up to approximately 4%

Propeller Boss Fin Cap


High-efficiency propellers

CO2

reduction

(Kappel)


Heat recovery system

Fuel saving 7-12% depending on sophistication of the heat recovery plant

CO2

reduction


Reducing block co-efficient

Vessel type Block co-efficient CO2

reduction

Lighter 0.90 5-10%

Bulk carrier 0.80-0.85 12-17%

Tanker 0.80-0.85 12-16%

General cargo 0.55-0.75 13-22%

Containership 0.50-0.70 14-26%

Example:115,000 dwt AFRAMAX tanker with a lightweight of18,900 tons.•

Increasing the lightweight by 15% (2,900 ton steel at USD 8.7 mill) would reduce fuel burn by 4,200 ton per year

•

This adds up to USD 1.5 mill. annually or USD 30 mill. over 20 years

•

The Co2 reduction amounts to 12,600 ton peryear or 252,000 ton over a period of 20 years

CO2

reduction


4. The Air Cavity System



Compressor

Air deflection before propeller

Air Cavity

Air Cavity System from belowThe Air Cavity System


Additional Shell Plating

Additional Floor Plating

Area equivalent to basis vessel

Weight increase: Marginal to a traditional vesselThe Air Cavity System


Principal DimensionsLength over all

333.30 mLength between pp

318.00 mBreadth, moulded

59.90 mDepth, moulded

32.10 mDesign draught

21.06 m

Speed, service, 15 % s.m.

15.9 knPropulsion power, 85 % MCR:

~21.000 kWFuel consumption:

90 t/day

ConsumablesHeavy fuel oil

8600 m3Marine diesel oil

375 m3Lubricating oil

300 m3Fresh water

500 m3Ballast water

99,000 m3

Cargo capacityCargo tanks 1 to 5, P+S 340,000 m3Slop tanks P+S

10,100 m3

DeadweightDeadweight at design draughtwith air in cavity: 283,125 t

ACS area4,300 m2

Case Study: 280,000 DWT VLCCThe Air Cavity System


ACS area4,300 m2

Air supply system

•

Double air compressors –

2 x 5.000 m3/h @ 2.2 bar delivery•

Common air feed pipe / redundant distribution system•

Air supply rate to cavity, normal operational conditions: 1.500 m3/h•

Power consumption at normal operational conditions: 150 kW



Tank Test result of Effective Power at Design Speed(HSVA full-scale extrapolation)

0

2000

4000

6000

8000

10000

12000

14000

6.0 8.0 10.0 12.0 14.0 16.0

Speed (kn)

Pe (k

W)

BASIS VLCC

ACS VLCC

~ 0.4 knot

~ 15 %

Speed and power

•

Speed and power curve for reference vessel (A) vs. ACS vessel (B)

•

No sea margin included



2,550 DWT, 83 m LOA

ACS Demonstrator

ACS DemonstratorThe Air Cavity System


ACS Demonstrator sea trial

•

Sea trials to be conducted with and without ACS

•

FORCE and Germanischer Lloyd to perform sea trials in accordance with standard procedures

•

ACS demonstrator tests to include:

–

Speed trials in calm water

–

Speed tests in waves

–

Maneuvering tests

•

Environmental conditions of waves and ocean currently to be documented by wave buoy.

•

Based on the sea trial data with ACS, the scaling procedure for ACS will be made and reliable results for large ocean-going ships will be made.



5. Major emissions reductions

Major emissions reductions



•

According to a report from IMO’s

subcommittee on bulk liquids and gases (BLG) published in December 2007, a 10% reduction in fuel burn for existing ships and 30-40% or more for new buildings are achievable

•

ACS combined with other technologies can reduce shipping's CO2

emissions TODAY by a minimum of 10% to a maximum of 50% depending on vessel type.

Technology Maximum

fuel

savings

Propeller technology:Contra rotating propellersTwin propellers –

twin enginesPropeller Boss Fin CapHigh-efficiency propellers

10%5-10%

4%4%

Heat recovery system 8%

Block co-efficient. 15-25%

Air Cavity System -

reducing the friction resistance of the hull.

15%

Speed reduction 30%

Other design modifications. 10%

Total for bulker and tankers 50%

Total for containerships 36%



Fuel burn reduction on a 12.000 TEU containership

Reducing fuel burn on a 12.000 TEUcontainership by 20%

Assuming current new build price:USD 175 million US.

Assuming fuel cost:USD 560 pr ton.

Currently Savings

Per day Annually Over 20 years

Fuel burn 380 tons pr day 76 tons 29.680 tons 59.4 million tons

In USD USD 171.000 per day USD 42.560 USD 11.9 million USD 238 million

CO2-emssion 1.216 tons of CO2 pr. day 243 tons 68.040 tons 1.36 million tons



We need Western innovation at Asian costs

•

Moving ship building to Asia may have gotten ship owners vessels at a lower cost, but the innovation traditionally embedded in western shipbuilding was lost in the process.

•

For generations shipbuilding skills has been refined by European & US shipbuilders resulting in more and more efficient ship designs.

•

For hundreds of years they western shipmakers

have succeeded in annually making more efficient ships for shipowners to race other shipowners

•

The maritime industry needs to get back on the innovation track for the sake of the environment, public health, global economy and their own shareholders.

•

There is nothing that prevents Western innovation at Asian costs.



Mega-boxship

rush

•

Asian shipyards have adapted to new ’mega-designs’, but have repeatedly stated that new ‘environmental’

technology designs are ‘unrealistic’

•

How is this possible, when in six months, Asian shipyards have adapted technology to build ships as much as twice as big as ever before –

250 meters to 450 meters

•

Asian shipyards are among the most technologically advanced in the world



6. New builds

and new technologies

New builds and new…


3.693 new builds in the book

•

There are currently 3.692 orders for new ocean-going vessels the in excess of 150 meters on the books of shipbuilders –

just for the coming 3 years -

2008-2010

•

Taking average fuel burn figures for these 3.692 vessels (mainly bulk carriers, containerships andt

ankers) those vessels alone will burn more than 63 million metric tons of bunker fuel per year –

generating 202 million tons of CO2

, 3,3 million tons of SOx

and 6,2 tons of NOx

per year. These ships alone will increase present emission by 16% -

in 3 years only.

•

During these vessels total lifespan of estimated 20 years, it will result in emission of 4 billion tons of CO2, 66 million tons of SOx

and 124 million tons of NOx.

•

Because these vessels have no equipment installed (Scrubbers) to reduce SOx, this would mean the same as launching a staggering 29 billion new cars or -

39 times the total world car fleet of 750 million cars



Environmental savings on new builds

•

ACS and other technologies can significantly reduce CO2, SOx

and NOx

emissions from new builds.

•

A minimum emission reduction of 30% is recognised by IMO in its BLG report from December 2007 though the various technical measures are described as ‘voluntary’.

•

Introducing scrubbing would reduce NOx

and SOx

BY 98& and 99% respectively equalling the removal of 29 billion cars from the worlds roads.


All figures in metric ton

Annually Over 20 years

CO2 60,6 mill. 1,2 billion

NOx 1,86 mill. 37 mill.

SOx 1 mill. 20 mill.


Cost savings on new builds

If all 3.692 new builds on order were fitted with technologies recognized in the IMO BLOG report, saving

30% of fuel, operating costs could be lowered significantly.

19 million ton of fuel at USD 560 per tonne equals an annual saving of USD 10.6 billion per year or USD

212 billion over 20 years. And this is only for new builds produced in the next 3 years.

How can shipping say that the environment doesn’t pay?

One scrubber (reducing SOx

by 99%) would cost less than $1.5 million -

or equivalent to less than 15

days of vessel charter. So far only equipped on 1 ship. Existing

‘denox’

systems can remove NOx

by 95%

but only equipped on 20 ships.



Will they say no to $200 billion in cost savings?New builds and new…

If all 3.692 new builds on order, would follow the IMO Voluntary

reduction of 30-40%, 10 billion USD could be saved annually in the current new building program.

How can shipping say that charters and banks don’t care about losses of over 200 billion over 20 years?


7. Shipping vs. aviation

Shipping vs. aviation



•

Shipping investors looking at the numbers of new builds on order and rising oil prices must question why shipping companies are not investing in new technologies that can save millions of dollars, as the aviation industry has.

•

Boeing unveiled the 777 Dreamliner

plane to great applause because it will reduce fuel consumption and CO2 emission by 20%

•

The Boeing 747/8 is an revamped design on the old jumbo that has slashed CO2 emissions by 15% in under 3 years

•

Boeing boasts record orders as the likes of Virgin Atlantic look to provide savings as airlines look to reduce CO2 emissions by 30%.



What can be done now? Wing tips & propellers

•

Danish airline Sterling has introduced wing tips –

saving 4% fuel costs and CO2.

•

High-efficiency ship propellers (eg. Kappel

blades) have been available for 20 years but not used

•

The blades could save 4% fuel and CO2 equaling 48 million ton per year

•

This could be translated into saving 16 mill. ton of bunker fuel at USD 5.6 billion annually


Kappel

Blade: 4% fuel saving


8. Conclusion: Shipping can lead the way

Conclusion


•

Voluntary recommendations from IMO BLG reducing CO2 emissions by

30-40% report should be made mandatory

•

There is little time available to address the issue of climate change and air pollution

•

Shipping is by far the biggest transport polluter in the world emitting as much as 260 time more SOx

than all the worlds cares put together

•

Mandatory SCRUBBER Retro FIT program for ships with more than 10

years of life.

•

Technologies are widely available NOW..!

•

Shipping needs to look at the aviation industry where fuel costs

and Co2, NOx

and SOxsavings

through ingenuity are encouraged and heavily financed

•

“SEABUS”

Large scale Ship building has to be moved back to the EU & US over the next 20 year, making environmental & efficient ships based on and protected by IP.

•

We ask you to incorporate ACS and other fuel efficiency and scrubbing technologies into state, federal and international regulations.

Conclusion

Conclusion


Q&A

“We are using the knowledgewe already have to make a difference. That is our duty. What is yours?”

- DK Group FounderJorn

P. Winkler

Thank you for your attention



Appendix 1 Propeller technology



Twin-propellers –

twin engines

Advantages•

Short main engines (21 m)

•

Reasonable propeller size

•

Reliability because of well proven components

•

High propulsion efficiency and thereby low fuel costs

•

Full redundancy

•

Reduces fuel burn by 5% to 10%

•

Better manoeuvrability

than single-propeller solution



Contra Rotating Propellers

Advantages•

Very high propulsion efficiency

•

(10 % improvement vs. twin screw depending on relation between main engine and thruster)

–

less installed power –

lower fuel costs

•

Propulsion redundancy

•

Very good manoeuvrability

•

Very high flexibility –

propulsion and electrical power

•

Reduced size of engine room


Increasing the propeller efficiencyPropeller technology

High-efficiency propellers (e.g. Kappel

blades)

•


Propeller Boss Cap Fin (PBCF)

•
