Slide 1: Euronav's Road to Decarbonisation
EURONAV’S ROAD TO DECARBONISATION REACHING NET ZERO BY 2050 Thursday May 5th, 2022
Slide 2: Introduction
INTRODUCTION HUGO DE STOOP, CEO Thursday 5 May 2022
Slide 3: Aim of Today's Presentation
AIM OF TODAY’S PRESENTATION Today is a chance to showcase what we have done so far… and what we plan to achieve Transporting oil is what we do We operate safely in often harsh weather conditions We apply the highest standards possible in all facets of our business Sustainability and delivering a cre
Slide 4: Crude Oil Transportation and Sustainability: Is It Possible?
Q: CRUDE OIL TRANSPORTATION < > SUSTAINABILITY. IS IT POSSIBLE? A: NOT ONLY IS IT POSSIBLE BUT IT IS NEEDED 4
Slide 5: Energy Transition and Security Are Not Mutually Exclusive
THE LAST 12 MONTHS HAVE TAUGHT US THAT ENERGY TRANSITION & SECURITY ARE NOT MUTUALLY EXCLUSIVE Global energy requirements to 2030 - Oil still has key role • In 2000 fossil fuels made up 81% of global Energy demand…. In 2019 it was still 81%. • Although renewables are set to significantly grow, oil r
Slide 6: Sustainability – Nothing New at Euronav
SUSTAINABILITY – NOTHING NEW AT EURONAV “THE OCEAN IS OUR ENVIRONMENT” - Our tagline since…2005 6
Slide 7: Euronav's Vision
EURONAV’S VISION To responsibly lead the global crude oil tanker industry. “A vision statement is a company's long-term road map, indicating To seize every opportunity to reshape our industry in an era of unprecedented both what the changes. company wants to become and defining To promote and suppor
Slide 8: Mission Statement
MISSION STATEMENT FOR OUR CLIENTS FOR OUR SOCIETY To operate in a manner that To deliver an essential source of contributes to the success of their energy in ways that are business objectives by providing “A Mission economically, socially and flexible, global high quality and environmentally viable
Slide 9: Agenda – Euronav's Road to Decarbonisation
AGENDA – EURONAV’S ROAD TO DECARBONISATION Part 1 – Sustainability at Euronav Part 3 – Sustainability strategy • Setting the scene Introduction Sustainability, the journey ahead • Euronav sustainability Hugo De Stoop, CEO Hugo De Stoop, CEO credentials Brian Gallagher, Head of IR and Communications
Slide 10: Setting the Scene
SETTING THE SCENE BRIAN GALLAGHER, HEAD OF IR AND COMMUNICATIONS Thursday 5 May 2022
Slide 11: Tanker Market Structure
TANKER MARKET STRUCTURE Seasonal Few customers, lots of suppliers 46 Quarterly average VLCC rate 1990-2020 Thousands 44 42 Traders 40 38 36 34 Oil Refiners 32 Companies 30 Q1 Q2 Q3 Q4 Source: Euronav Ship Cyclical Broker 100.000 Monthly average 1 Year TCE rate 1990-2018 90.000 80.000 70.000 60.000 o
Slide 12: Shipping's Track Record on Spills and Emissions
SHIPPING ALREADY HAS A TRACK RECORD OF TACKLING SPILLS, THREATS TO MARINE LIFE AND EMISSIONS ISSUES Dramatic fall in in oil Single hull to double hull Ballast water IMO 2020 – 85% cut to pollution spills transition treatment systems SO2 emissions 30 No of spills >700t 25 28% 20 VLCC global fleet dwt
Slide 13: We Need More Shipping, Not Less
WE NEED MORE SHIPPING … NOT LESS ! Shipping – most efficient transportation mean Shipping – facilitated trade growth but capped emissions 220 World GDP growth & Shipping volumes 200 180 160 140 Global shipping emissions 120 100 Source: IMO GHG study 2009. Notes: 1) Energy-efficient transport is much
Slide 14: Fleet Modernisation and Speed Reduction Cut Consumption
FLEET MODERNISATION & SPEED REDUCTION HAVE ENABLED HUGE CONSUMPTION DECREASE 80 75 70 Laden condition consumption (mtn/day) at 65 60 55 50 45 40 35 30 Artois 2001 Alsace 2008 Noble 2008 Antigone 2015 Ardeche 2017 Delos 2021 14 Source: Euronav
Slide 15: Oil Part of the Energy Mix and Here to Stay
OIL PART OF THE ENERGY MIX ….& HERE TO STAY 15 Source: Comparative Study of Green and Synthetic Polymers for Enhanced Oil Recovery (2020)
Slide 16: Direct Applications of Crude Oil
DIRECT APPLICATIONS OF CRUDE OIL 16 Source: British Plastics Federation
Slide 17: Everyday Applications of Crude Oil
EVERYDAY APPLICATIONS OF CRUDE OIL 17
Slide 18: Euronav Sustainability Credentials
EURONAV SUSTAINABILITY CREDENTIALS BRIAN GALLAGHER, HEAD OF IR AND COMMUNICATIONS Thursday 5 May 2022
Slide 19: It's in Our DNA
IT’S IN OUR DNA And in our ratings 19
Slide 20: Sustainability Matters at Euronav: Environmental
SUSTAINABILITY MATTERS AT EURONAV TANKER SECTOR LEADING ESG FOUNDATIONS ESTABLISHED Two years B rating for CDP Strategy Ria qui del ium aut E Increased rating spread for environmental record Engagement with trade organisations Protecting great whales and their habitat – first industry member of Whal
Slide 21: Tanker Sector Leading ESG Foundations: Social
TANKER SECTOR LEADING ESG FOUNDATIONS ESTABLISHED Strategy Bloomberg Gender Equality Index for 5th consecutive year Ria qui del ium aut S Leadership & awards for sustainability Active management of social issues 21
Slide 22: Tanker Sector Leading ESG Foundations: Governance
TANKER SECTOR LEADING ESG FOUNDATIONS ESTABLISHED Second out of 52 shipping companies in Strategy Ria qui del ium aut Governance survey (2021 ESG Scorecard) G Sustainability Committee since 2019 40% Male Fully independent Supervisory Board Supervisory Board 60% Female 22
Slide 23: Active Sustainability Management Leads to Higher Valuation
ACTIVE SUSTAINABILITY MANAGEMENT LEADS TO HIGHER VALUATIION Share price differential - top minus bottom quartile in Webber Shipping Corporate Governance Survey 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 Apr-20 Oct-20 Apr-21 Oct-21 -10,0 23
Slide 24: The Road to Decarbonisation
THE ROAD TO DECARBONISATION KONSTANTINOS PAPOUTSIS SUSTAINABILITY MANAGER Thursday 5 May 2022
Slide 25: IMO Decarbonization Targets
IMO DECARBONIZATION TARGETS 25
Slide 26: Setting the Scene
SETTING THE SCENE TIME FRAME Reference year Basis year End year 2008 2020 2050 EMISSIONS COVERAGE • Fuel production to fuel consumption (Well-to-Wake) • Scope 1 (bunkers), Scope 2 (Electricity + Gas for facilities) • Future fleet size • Vessel age OPERATIONAL • Fleet rejuvenation pace • Dry-docks fo
Slide 27: Decarbonisation Levers (2030 & Beyond)
DECARBONISATION LEVERS (2030 & BEYOND) DIGITALISATION FLEET MODERNISATION OPERATIONAL MEASURES ENERGY-EFFICIENCY TECHNOLOGIES LOWER AND ZERO-EMISSION FUELS 27
Slide 28: What It Means for Planet and Society
WHAT IT MEANS FOR PLANET AND SOCIETY Annual CO2 Reduction: 2020 compared to 2008 5 Approx. 1.5 Mil MT of CO2 4 Equivalent to 75 Mil trees (Source: Arbor Day Foundation, US Dept of Agriculture) 3 Annual Expected CO2 savings by 2050 with a net zero policy Millions MT A total of 3.9 Mil MT of CO2 2 Equ
Slide 29: Euronav Competitive Advantage in Industry's Transition
EURONAV COMPETITIVE ADVANTAGE IN INDUSTRY’S TRANSITION FIT-FOR-PURPOSE TRANSITION OUR PEOPLE SHORT TERM: Human intervention will make the Immediate actions to reduce CO2 difference Euronav people on the ground will MEDIUM TERM: help us design & implement the most Invest in energy-efficiency tailored
Slide 30: Short-Term Actions - Immediate Actions to Reduce CO2
SHORT-TERM ACTIONS - IMMEDIATE ACTIONS TO REDUCE CO2 DEFINITION Primarily: speed reduction - other measures: virtual / just-in-time arrival Favorable market environment AN UNPRECEDENTED • Current supply chain disruption allows for more resilience and less just-in-time supply chain OPPORTUNITY • Bunk
Slide 31: Euronav's Pathway to Decarbonisation
EURONAV’S PATHWAY TO DECARBONISATION REDUCE & INVEST SWITCH & SCALE-UP Less Energy used Cleaner Energy used Carbon neutrality 2040 2022 at roundtrip via 2027 40% lower CO2 Net Zero intensity at fleet CO2 lower carbon level vs. 2008 emissions fuels • At least 80% less TI pool to offer First vessel CO
Slide 32: Fuel Technology
FUEL TECHNOLOGY RUSTIN EDWARDS HEAD OF FUEL PROCUREMENT & DEVELOPMENT Thursday 5 May 2022
Slide 33: IMO Dates of Notice
IMO DATES OF NOTICE Current Fuel Mix Implementation of EU ETS Scheme Full phase in of EU ETS for Maritime Cut Carbon Intensity by 70% of 2008 baseline Cut Carbon Intensity by 40% of 2008 baseline Adoption of Med SECA Zone The R&D GAP 33
Slide 34: Bridging the R&D Gap
BRIDGING THE R&D GAP Green Hydrogen Adoption of bio-blended Fuels Ammonia Green Ammonia LNG Green/BIOMass LNG/Synthetic LNG Liquid Fuel Biofuel mixes (Green) Methanol/ Biofuel Green/Bio- Methanol Kites and Rotor-sails Kites and Rotor-sails Onboard abatement and storage systems GHG Scrubbers and onbo
Slide 35: Bridging the R&D Gap
BRIDGING THE R&D GAP TECHNOLOGY DEVELOPMENTS • Engine Design and Testing • Mechanical Abatement technology development and implementation LOGISTICS SUPPLY CHAINS • Supply Chains for future fuels to meet the needs of the future fleet • Production • Distribution • Terminal operations and bulk distribu
Slide 36: Euronav Actions to Date
EURONAV ACTIONS TO DATE BIOFUEL TRIALS ON 2 SHIPS VLSFO BIO BLEND OF 30% MGO Bio Blend of 50% • Testing of the long-term stability and in port operations • Testing of the operational stability of the fuel • Fuel was not touched for 100 days as vessel during a voyage in ballast and in laden condition
Slide 37: Fleet Modernisation and Newbuildings
FLEET MODERNISATION AND NEWBUILDINGS ALEX STARING, CHIEF OPERATING OFFICER Thursday 5 May 2022
Slide 38: Highly Regulated Shipping Sector with Asset Useful Life of 5-20 Years
HIGHLY REGULATED SHIPPING SECTOR WITH ASSET USEFUL LIFE OF 15-20 YEARS ONLY UTILISATION SIGNIFICANTLY FALLS AFTER 15 YEARS Survey cycle every 5 years then every 30 months Tanker utilisation tails off 15 years plus heavy consumers Older vessels = 38 Source: Euronav
Slide 39: Very Strict Time Regulations with Emissions at Their Core
FOR THE FIRST TIME VERY STRICT TIME REGULATIONS WITH EMISSIONS AT THEIR CORE 39
Slide 40: Older Tonnage Under Regulatory, Commercial and Emission Pressure
OLDER TONNAGE UNDER REGULATORY, COMMERCIAL AND NOW EMISSION PRESSURE Cedar 2022 Cap Maria 2012 a Energy Efficiency Design 2.79 gr/tnm 3.25 gr/tnm Index (EEDI) Speed 14.5 knots at MCR 15.9 knots at MCR Daily fuel consumption 40.1 tons/day at MCR 66.9 tons/day at MCR Range of features as Energy Saving
Slide 41: Energy Transition Is Feasible When Costs Incentivise the Switch
ENERGY TRANSITION IS FEASIBLE WHEN COSTS INCENTIVISE THE SWITCH Evidence of last 9 months has put real pressure on transition Oil price per bbl $ Japan LNG price expressed in per bbl equivalent $ 41
Slide 42: Current Regulatory and Commercial Landscapes Require Immediate Investments
THE CURRENT REGULATORY & COMMERCIAL LANDSCAPES REQUIRE IMMEDIATE INVESTMENTS Regulatory & commercial landscape demands investment now 100% 93% Transition fuels available now with gains 90% in emissions reductions 84% 80% However Hydrogen & Ammonia Well to Propellor emission reduction 70% feasibility
Slide 43: Joint Development Programme for Dual Fuel Ammonia Vessels
JOINT DEVELOPMENT PROGRAMME TO DEVELOP DUAL FUEL AMMONIA VESSELS Increased pipework ahead of new ammonia ready engine Additional fuel tanks Strengthened hull & deck Additional pipework 43
Slide 44: Green Financing
GREEN FINANCING LIEVE LOGGHE, CFO Thursday 5 May 2022
Slide 45: Shipping – Unique Financing Challenges
SHIPPING – UNIQUE FINANCING CHALLENGES Tanker shipping capital intensive with higher regulation costs coming Tanker capital base rising but bank funding has halved since 2015 410 38 Capital Intensity 390 36 Capital Value of VLCC & Suezmax fleet $m 34 370 32 Pressure to $bn Bank Funding 350 Invest Cy
Slide 46: Poseidon Principles
POSEIDON PRINCIPLES SHIPPING INITIATIVE DRIVING EMISSIONS REDUCTIONS Poseidon principles cover 70% ship lending Euronav emission trajectory vs Poseidon Principles trajectory BNP Paribas 0% KW IPEX China EXIM -5% Bank of China ING Credit Agricole -10% SuMi Trust Credit Suisse ABN AMRO -15% Nordea Cit
Slide 47: Sustainable Financing in Action - 2020
SUSTAINABLE FINANCING IN ACTION - 2020 Ship Financing – the past Ship Financing – the present & future Emission targets > IMO All banks to agree $469 m revolver Euronav and its bank partners finalise the $870,5 m first sustainable linked sustainable loan on September linked loan $244 m 10th, 2020 te
Slide 48: Sustainable Operations in Tanker Shipping
SUSTAINABLE OPERATIONS IN TANKER SHIPPING MICHAIL MALLIAROS GENERAL MANAGER ESMH Thursday 5 May 2022
Slide 49: Ship Management Culture – In-House & Partnerships
SHIP MANAGEMENT CULTURE – IN-HOUSE & PARTNERSHIPS Efficiency Quality Opex 49
Slide 50: Sustainability Matters at Euronav
SUSTAINABILITY MATTERS AT EURONAV ESG activity at Corporate level HSQE MS in Ship Management Environmental (Social) Safety • Environmental management system • Safety management system • ISO 14001 (Environmental Management) • ISO 45001 (Occupational Health & Safety • Environmental Targets and KPIs ma
Slide 51: Short and Long-Term Targets
SHORT AND LONG-TERM TARGETS Equal opportunities for all Occupational health and safety Making a positive impact through our Reduction of our ecological footprint business practices 51
Slide 52: Wellbeing
WELLBEING MICRO-SOCIETIES ON EACH VESSEL IMPACT on society & communities Career DEVELOPMENT EQUAL opportunities CARE for people 52
Slide 53: Sustainable Procurement in Tanker Shipping
SUSTAINABLE PROCUREMENT IN TANKER SHIPPING ZOIS DAGKARIS DEPUTY GENERAL MANAGER ESMH Thursday 5 May 2022
Slide 54: Green Procurement
GREEN PROCUREMENT Target to eliminate single use of plastics by 2024 on board our vessels Benchmarking & evaluating our supplier base by introducing Sustainability Index Introducing requirements of recycled packaging to our suppliers & forwarders Integrate sustainability criteria in our Procurement
Slide 55: Upgrades - Retrofits Investments
UPGRADES - RETROFITS INVESTMENTS Advanced antifouling coating for reducing emissions USD 40+ Mio invested in retrofit and Retrofits on main engines and upgrade projects between 2016 and Training officers on 2021 hydrodynamic SEEMP measures improvement since 2014 appendices (e.g. Mewis Ducts) Increas
Slide 56: Energy Savings Technology
ENERGY SAVINGS TECHNOLOGY Propeller silicone coating Hull coating To improve energy-efficiency Implementation of advanced and set better fouling controls anti-fouling paints over hull area reduces drag and improves fuel Equalising ducts efficiency Wind propulsion (pilot project) To improve propulsio
Slide 57: Case Study – FAST Platform
CASE STUDY – “FAST” PLATFORM FLEET AUTOMATIC STATISTICS & TRACKING Improves fleet performance Improves fuel efficiency & therefore emissions performance Acts as centralised platform between vessel and onshore office Data flows measurable & therefore actionable 57
Slide 58: Sustainability Detailed Journey Ahead
SUSTAINABILITY DETAILED JOURNEY AHEAD HUGO DE STOOP, CEO Thursday 5 May 2022
Slide 59: Euronav – Decarbonisation Progression: Reduce & Invest
EURONAV – DECARBONISATION PROGRESSION REDUCE & INVEST Less Energy used 59
Slide 60: Euronav – Decarbonisation Progression: Switch & Scale-Up
EURONAV – DECARBONISATION PROGRESSION SWITCH & SCALE-UP Cleaner Energy used 60
Slide 61: Euronav's Pathway to Decarbonisation
EURONAV’S PATHWAY TO DECARBONISATION REDUCE & INVEST SWITCH & SCALE-UP Less Energy used Cleaner Energy used Carbon neutrality 2040 2022 at roundtrip via 2027 40% lower CO2 Net Zero intensity at fleet CO2 lower carbon level vs. 2008 emissions fuels • At least 80% less TI pool to offer First vessel CO
Slide 62: Euronav Is Set to Deliver Net Zero by 2050
EURONAV IS SET TO DELIVER NET ZERO BY 2050 BUT AIMS TO ACHIEVE TARGET EVEN EARLIER Oil still has a critical role to play in the energy transition 01 • Fossil fuels will decrease on a relative basis … • … but oil will remain a core energy source as the world still needs energy volume and security The
Slide 63: Q&A
Q&A © EuRONAV Thursday 5 May 2022
Slide 64: Thank You
THANK YOU Thursday 5 May 2022 © EURO