MISC Annual Report 2018

HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 161 MISC BERHAD ANNUAL REPORT 2018 160 NEW GREENER VESSELS In 2018, MISC Group took delivery of a further two latest generation Moss type LNG Seri C vessels, Seri Camar and Seri Cemara . These advanced LNG carriers incorporate state-of-the art green technologies and design, enabling better and improved energy efficiency, emissions reduction, biodiversity management and end-of-life disposal. MISC now has five Seri C vessels in its LNG fleet. Also in 2018, our petroleum fleet named two LNG dual-fuelled vessels, Eagle Brasilia and Eagle Bintulu , which are amongst the first vessels in the world to use cleaner LNG fuel for petroleum trading. Both vessels are equipped with LNG dual-fuel capability, designed to receive LNG fuel from LNG bunkering vessels via ship-to-ship transfer. These vessels are the first in what will be an expanding fleet of LNG dual fuelled vessels in the years to come, as part of our Group’s Green Sustainability Agenda that drives us to deliver environmental efficiency alongside operational excellence. The petroleum fleet also took delivery of four newbuild green vessels in 2018 with optimised hull design and modern, energy efficient engines and machinery. These two Aframax tankers, namely Eagle Barcelona and Eagle Brisbane and two Suezmax tankers, namely Eagle San Francisco and Eagle San Jose are fully compliant with upcoming regulations on ballast water management, sulphur cap and carbon monitoring, reporting and verification, and they are also certified with Green Ship Programme under the Maritime Singapore Green Initiative and maritime Green Passport notation. All the newbuilds are equipped with superior energy efficiency capabilities with the designed CO 2 emissions per capacity-mile significantly lower than the International Maritime Organisation (IMO) baseline. The attained Energy Efficiency Design Index (EEDI) by these new vessels are between 22% to 27% lower than the IMO baseline EEDI, indicating an efficiency above and beyond the statutory requirements set by IMO. ADVANCED LNG CARRIERS DELIVERED making a TOTAL OF 5 Moss type Seri C vessels ENERGY EFFICIENT VESSELS comprising two Aframax tankers and two Suezmax tankers delivered with GREEN PASSPORT NOTATION AND GREEN SHIP PROGRAMME 4 ........................................................................... 2 named among the first vessels in the world to use cleaner LNG fuel for petroleum trading DUAL FUEL VESSELS 2 ........................................................... 10.60 10.00 10.20 10.40 9.60 9.80 9.40 9.20 2016 2017 2018 2019 2020 10.45 10.01 9.65 2020 Target: 9.82 LNG CO 2 Intensity (gCO 2 /t-nm) LNG 2020 Target 10.00 10.20 10.40 9.40 9.60 9.80 9.00 9.20 8.80 8.60 2016 2017 2018 2019 2020 9.69 10.23 9.16 Product CO 2 Intensity (gCO 2 /t-nm) Product 2020 Target 3.80 3.40 3.60 3.20 3.00 2016 2017 2018 2019 2020 3.66 2020 Target: 3.33 Petroleum CO 2 Intensity (gCO 2 /t-nm) Petroleum 2020 Target 3.52 3.25 2020 Target: 9.59 CARBON INTENSITY TARGETS In 2018, we recorded an 11% reduction in carbon dioxide (CO2) intensity from our petroleum fleet, 8% reduction from our LNG fleet and 5% reduction from our product fleet, all against our 2016 baseline. This was achieved using better monitoring and reporting and better process integrations to improve operational efficiency. Over 2018, we implemented DNVGL’s Navigator and Eco Insight monitoring and reporting tool fleetwide. This enables better informed decisions on vessel energy efficiency, with system generated alerts for potential fuel saving. We also continued our implementation of ISO 50001 Energy Management System certification for our petroleum fleet and will roll this out into our LNG and product vessels in 2019. Energy saving second generation Propeller Boss Cap Fins (PBCF) were installed on an additional three LNG vessels in 2018. Refinements in fin shape and height mean enhanced propeller thrust and reduced torque, which should lead to fuel savings of 4-5%, compared to 2% with the first generation PBCF. To date, a total of 19 vessels in our fleet have been installed with PBCF. Hull cleaning and propeller polishing is carried out across the fleet based on performance trend analysis and continuous monitoring of each vessel’s performance in order to avoid excessive fuel consumption. The energy efficiency performance of our vessels during discharging and loading operations at ports are also monitored using the Energy Efficiency Discharging Index (EnDI) and Energy Efficiency Loading Index (EnLI). Opportunities for fuel saving are highlighted timely to our operations and commercial team for performance enhancement and we have registered a gradual improvement in EnDI and EnLI indicators across the fleet. An average of 10-15% reduction in EnDI and EnLI was observed in 2018. OUR SUSTAINABILITY FOCUS 2018 ENVIRONMENT THE FIRST ECO MOVIE HOUR screened across 10 OFFICES globally, participated by close to 200 EMPLOYEES ECOPLEDGE campaign participated by 31 TEAMS with a total of 930 EMPLOYEES BUI LDING AWARENES S Awareness of our MISC carbon targets and an understanding of our environmental and energy saving initiatives are also essential for a more comprehensive integration and implementation of our sustainability agenda. Over the year, we regularly held conferences, training, superintendent ship visits and internal ship audits to raise awareness and educate employees at all levels on the importance of energy management. In particular, all our sea employees underwent computer-based training to create continuous awareness towards energy efficiency measures and fuel performance improvement. A total of 120 employees attended Health, Safety, Environment and Operations Workshops on MISC’s environmental targets and objectives, and their personal role towards improving vessel energy management. Carbon management presentations were delivered to targeted shore employee groups to enhance understanding on MISC’s greenhouse gas monitoring and reduction initiatives. Environmental awareness and climate talks were held across our offices with the objective of educating and also promoting and creating a sense of environmental responsibility among employees. Close to 200 employees participated in our short-film event called Eco Movie Hour, where two short films with a powerful message on saving the environment were screened across 10 of our offices globally. It created engagement on the need to take action against urgent threats and on ways to overcome the rapid change of our current environment. MISC held a group wide environmental campaign titled ‘ECOPLEDGE’ to promote sustainable living practices among staff using the concepts of Refuse, Reduce, Reuse and Recycle. The three-month campaign from August to October 2018 focused on five areas, namely energy, food waste, plastics, paper and used clothes. In teams, participating staff chose one of the focus area to pledge on and carried out activities to translate their pledge into actions. A total of 31 team pledges from across MISC were received with 930 employees participating. A total of have been installed with Petroleum fleet certified with 19 VESSELS ISO 50001 ENERGY MANAGEMENT SYSTEM 5-11 REDUCTION IN fleet 2018 CARBON EMISSIONS INTENSITIES PBCF %