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Environmental Activities Results (FY2016)

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Midterm Environment Plan:
Fully aware of the environmental impact of its business activities, the MOL Group will lead the world shipping industry by proactively responding to environmental regulations and differentiating our services by aggressively developing and adopting the best technologies to protect the environment.

Legend: ◎ Achieved, ○ Generally achieved, △ Partially achieved,
× Did not achieve (target period/content changes)

1. Build Environmental Business, which Contributes to a Sustainable Society
Study R&D of advanced environmental technology, creation of new environmental businesses, and taking part in logistics that contributes to the environmental protection.
FY2016 Environmental Targets FY2016 Environmental Results

MOL established the Technology, Innovation, and Environment Committee to promote the development and adoption of innovative environmental technologies that increase corporate value and enhance the effectiveness and profitability of our businesses.

(1) Build a system that promotes internal sharing, extension, and review of information, and allows us to tap into and discover needs, including potential ones, from our customers' viewpoint.

(2) Create a system that sets mid- and long-term targets for environmental technologies, creates road maps, and introduces new technologies in the MOL Group owned and operated fleet.

(3) Explore and review issues in the maritime industry and formulate solutions

(1) Established "MOL Group Environmental Vision 2030," and widely publicized its commitment to promoting environmental management as an environmentally advanced corporation, such as developing the environmental and emission-free businesses into one of its future core operations as stated in the new management plan.

(2) Study on construction of LNG-fueled vessels and installation of SOx scrubbers in cooperation with customers.

(3) Launched the "ISHIN NEXT - SMART SHIP PROJECT -," which will adopt advanced support technologies for safer vessel operation and reducing environmental impact. Established the midterm environmental targets and roadmap.

(4) Established the 2020 SOx Regulations Compliance Committee in line with enactment of the 0.5% SOx cap effective in 2020, and researched and shared trends in the supply of compliant oil in 2020 and scrubber-related information.

2. Comply with Environmental Regulations
Reduce environmental impact through overall optimization and protect the global environment by engaging in company-wide efforts including ballast water management, ship recycling, prevention of global warming, prevention of atmospheric pollution, and response to diverse environmental regulations.
FY2016 Environmental Targets FY2016 Environmental Results
1. Further promote installation of the ballast water treatment system prior to the enforcement of new regulations, while monitoring developments in the ballast water convention.
Test the effectiveness of the ballast water treatment system installed on a vessel, and provide the manufacturer with feedback on defects/malfunctions/failures and requests for improvements.
The Ballast Water Management Convention is set to take effect in September 2017. Installed ballast water treatment systems as planned, while paying close attention to IMO movement. Ballast water treatment systems were installed on a total of 87 vessels as of June 2017.
2. Jointly collect information on scrubbers and fuel supply, with an eye toward retrofitting vessels with SOx emission reduction systems (scrubbers).

Global cap on SOx emissions taking effect in 2020.

(1) MOL completed preparations for installation of SOx scrubber on car carriers in service at the blueprint level and earned certification by Nippon Kaiji Kyokai.

(2) Almost completed study on the technology for retrofitting VLCCs.

(3) Collecting information about supply situation of low-sulfur fuels from oil companies.

3. Collect and verify data on installed NOx reducing systems and complete the demonstration test. Completed demonstration test of the Selective Catalytic Reduction (SCR) through NK subsidy program. Moving ahead to equip vessels with SCR components and continuing testing.
4. Develop and implement specific reduction measures for complying with domestic environmental regulations such as the Amended Energy Conservation Act and Tokyo Metropolitan Environmental Security Ordinance. Appropriately responded to compliance with domestic environmental regulations such as the Amended Energy Conservation Act and Tokyo Metropolitan Environmental Security Ordinance.
5. Select environment-friendly scrapping yards. Scrapped vessels at select environment-friendly and safe scrapping yards.
6. Prepare the inventory related to the Hong Kong International Convention, and promote its use on vessels. Started to provide vessel by vessel inventory list.
7. Maintain the same level of paper, water, and electricity consumption as in FY2015. Consumption (comparison with FY2015): paper (A4 sheet): +1%, water (m3): -2%, and electricity (thousand kWh): -2%, waste (tons): -73%
3. Proactively Utilize Technologies to Reduce Environmental Impacts
Promote energy-saving innovations for ships and ecosailing through active utilization of refined energy-saving technology that MOL acquired in the ISHIN project for the next-generation vessel concept.
Reduce CO2 emissions 11.5% per ton-mile by FY2016 compared to FY2009.
FY2016 Environmental Targets FY2016 Environmental Results
1.

Reduce environmental impact

(1) Reduce CO2 by 1% in FY2016 compared to FY2015.

(2) Reduce NOx by 1% in FY2016 compared to FY2015.

(3) Reduce SOx by 1% in FY2016 compared to FY2015.

Continually expanded operation of slow steaming. Installed systems to improve propeller efficiency such as PBCF. Studied adoption of the optimal trim system and vessel operation support system and conducted demonstration tests on vessels in operation.

(1) Reduced CO2 emissions by 6.5% compared to FY2015 (by 22.1% compared to FY2009)

(2) Reduced NOx emissions by 6.5% compared to FY2015

(3) Reduced SOx emissions by 4.6% compared to FY2015.

2. Install and verify the VPC system on an actual vessel. Assembled VPC system and started collecting operation data, but problems occurred and an investigation is underway to determine the cause.
3. Deliver 3 of methanol-fueled vessel series. All three methanol-fueled vessels were delivered.
4. Continue deeper feasibility study of the specification changes required to equip containerships with methanol-fueled engines. Completed the basic design for compatibility with LNG fuel through the Joint Development Program (collaboration with Samsung Heavy Industries Co., Ltd.)
5. Study the design, tank, and engine of an LNG-fueled tugboat. Study the conversion of other types of vessels to LNG-fuel. Determined the basic boat shape and installation method of the tank for the LNG-fueled tugboat. Will verify based on regulations and complete a detailed design. Currently studying conversion of other ship types to LNG according to customers' needs.
6. Promote projects that use wind power, such as Power Assist Sail and Wind Challenger Project. Started study to realize Power Assist Sail/Wind Challenger Plan.
7. Promote R&D on ways to reduce wind resistance on car carriers. Determined the optimal hull shape of the wider-breadth type of car carrier using computational fluid dynamics. Will use this development data for newbuilding vessels to study the optimal shape of specific vessels.
8. Continue to verify wind resistance reducing technologies on containerships. Verified the wind resistance-reducing effects on a containership for three months. Will continue to verify data.
9. Continue to verify and develop DPF <PM (particulate matter) removal system> installed on a vessel. Finished verification and removed DPF from the target vessel. Finished the demonstration test with the vessel in service through an NK subsidy program. Confirmed the effectiveness of the smoke and soot removal filter.
10. Fully practice Eco Sailing/Continue research on the use of big data for vessels. Shared information related to problems in slow steaming, and expanded measures to prevent reoccurrence. Adopted optimal trim system for delivered newbuilding vessels, promoting demonstration tests with vessels in service. The Liner Division introduced the Weathernews' web-based operation monitoring system, Exasite Voyage, to enhance monitoring of fuel consumption. The Iron Ore Carrier Division used and applied the Wethernews' Optimum Ship Routing (OSR) service to study the optimal output and implement optimal route navigation. Targets for analyzing route navigation were expanded to almost all vessels, to broaden the use of Eco Sailing. The Tanker Division deferred its decision to adopt Fleet Navi from Mitsui Engineering & Shipbuilding Co., Ltd., because the simulation data show a margin of error, although it showed a reduction of 2% to 4% in fuel consumption.
11. Reduce unit energy consumption at offices and on domestic coastal vessels for the medium to long term. Reduce by 1% in FY2016 compared to FY2015. Unit energy consumption at offices and on RoRo ships increased by 2% from FY2015. ×
12. Move ahead with construction of four ferries, which will offer improved environmental performance (two slated for delivery in 2017, two in 2018). The hybrid propulsion system was equipped on "SUNFLOWER FURANO" delivered in May 2017
13. Promote more energy-efficient vessel operation through the use of improved power management systems. 13. Installed the wave radar on the target vessel (PCC). Will verify the optimal navigation plan, which combines a wave measurement system with simulation of vessel operations, to vessels in service and conduct a demonstration test of the system's accuracy.
4. Actively Disclose Environment
Respond to stakeholders' interests in MOL's environmental policy by disclosing KPI for transport with low environmental impact and various environmental data using the Web site and Safety, Environmental and Social Reports.
FY2016 Environmental Targets FY2016 Environmental Results
1. Proactively promote calculation, analysis, and disclosure of following data and disclosure of reduction effect through the Environmental and Social Report, the company website, and various other external media.
(1) Energy consumption volume
(2) GHG emission volume (Including Scope 1-3)
(3) SOx, NOx emission volume
(4) Consumption volume of other resources
Proactively disclosed data. Dow Jones Sustainability Index, FTSE4good, and MS-SRI, which are major Social Responsibility Indices (SRIs) continued to include MOL.
2. Continue third-party verification of CO2 emissions. Conducted third-party verification of CO2 emissions.
5. Ensure Safe Operations
Ensure safe operations to prevent unexpected environmental impacts, and pursue zero ocean pollution caused by marine incidents.
FY2016 Environmental Targets FY2016 Environmental Results
1. Prevent serious marine incidents by improving MOL's safe operation system. Held table top drills on the assumption of incidents involving a VLCC and iron ore carrier to reinforce the risk management system. Expanded information on oil leakage incidents occurring on vessels operated by other companies. Held Vessel Safety Campaign and workshop to discuss casualties occurring in 2006, and offered e-learning programs about safety culture.
2. Further improve the quality of new vessel design and construction through health, safety, and environmental (HSE) activities at shipyards. Shared information on problems with major manufacturers. Introduced and conducted periodic HSE check system for shipyards where newbuilding vessels are under construction. Offered feedback about evaluations of ship construction superintendents and ship management companies to delivered vessels.
3. Continue to adopt the MOL Safety Standard Specifications on newbuilding vessels. Adopted MOL Safety Standards specifications to all delivered vessels.
6. Contribute to Conservation of Biodiversity
Raise awareness of biodiversity protection, promote waste reduction from vessels, and participate in volunteer activities for conserving biodiversity on a company-wide level.
FY2016 Environmental Targets FY2016 Environmental Results
1. Continue to reduce waste from vessels such as on-board waste, waste oil, and bilge. Sought to collect latest information and share it internally, and widely disseminate how vessels manage waste, at pre-boarding meetings. Established and widely disseminated onboard waste incineration policy.
2. Prevent cross-border transportation of foreign marine organisms through ballast water exchange in the open sea, and implement vessel cleaning to remove organisms on vessels to help conserve biodiversity. Promoted installation of ballast water treatment systems. Collected the latest information on management of biofouling on hulls, and shared it with concerned parties.
3. Support volunteer activities to help conserve biodiversity in Japan and overseas, such as tree planting. Supported tree planting and other volunteer activities in Japan and overseas that contribute to biodiversity. Continued the program to recycle used lashing belts to reduce waste.
4. Promote navigation with special consideration in the areas with high populations of large-sized marine life. Collect information on new and updated protected marine areas. Complied with regulations in protected whale habitat in North America.
7. Advocate Transport Policies and Measures Aimed at Contributing to Reduction of Environmental Impact
Proactively make recommendations so that environmental policy promotes utilization and reinforcement of the high environmental efficiency of shipping as transport mode, and contribute to environmental impact reduction and sustainable growth.
FY2016 Environmental Targets FY2016 Environmental Results
1. Make various efforts to encourage the modal shift, which has a low environmental impact, to industry groups, government agencies, and relevant ministries. Made a proposal to promote the Modal Shift, which has a low environmental impact, through the Japan Long Course Ferry Service Association, etc
2. Actively participate in energy-saving policies. Made proactive proposals for more practical content in the fuel reporting system (DCS: Data Collection System), through the Japan Shipowners' Association and the Ministry of Land, Infrastructure, Transport and Tourism.
8. Environmental Investment
Make environmental investment of 20 billion yen in 3 years, 60 billion yen in 6 years to respond to environmental regulations and to promote energy-saving innovation for vessels.
FY2016 Environmental Targets FY2016 Environmental Results
  • Make proactive investments in new environmental technologies such as methanol- and LNG-fueled vessels.
  • Develop a low-temperature waste heat recovery system (VPC).
  • Promote installation of ballast water treatment systems prior to the enforcement of new regulations, and respond to environmental regulations.
Environmental investments for three years from FY2014 to FY2016 totaled 14.26 billion yen. The investment in FY2016 was 5.34 billion yen.
(Details) Environment-related R&D activities: Methanol-fueled vessels, low-temperature heat recovery system (VPC), etc. 0.35 billion yen
Utilization and expansion of existing environmental technologies: PBCF, electronically controlled engine, adoption of Low Load Turning on main engine, low-friction hull paint, etc. 0.51 billion yen
Compliance with environmental regulations: Ballast water treatment system, ship recycling regulation and SOx regulation related etc. 3.09 billion yen
Ship operations: Fuel additives, optimal trim, vessel operation support system 1.09 billion yen
Initiatives of group companies: Environmental investments by international ocean shipping group companies 0.3 billion yen

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