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© Alfa Laval 1

Marine Marine ––solvingsolving environmentalenvironmentalneedsneeds and and savingsaving energyenergy

Joakim ThölinJoakim ThölinHead of Segment Marine & Diesel EquipmentHead of Segment Marine & Diesel Equipment

www.alfalaval.com

Marine & Diesel DivisionMarine & Diesel Division

The acquisition of Aalborg Industries resulted in� 15 main product groups� Leader in environmental and energy saving applications

Thermal fluid heating

Cooling and heating

Crankcase gas cleaning

Separation

Bilge water treatment

Tank cleaning

Steam generation

Waste heat recovery

Exhaust gas cleaning

Inert gas systems

Filtration

Ballast water treatment

Fuel conditioning

Desalination

Cooling and heating

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© Alfa Laval 2

www.alfalaval.com

The leaderThe leader–– in solving environmental needsin solving environmental needs

SOX NOX

Ballast watertreatment

Oily wastetreatment

Emissiontreatment

www.alfalaval.com

The leader The leader –– in saving energy and reducing COin saving energy and reducing CO22

Diesel powerMarine

www.alfalaval.com

Market drivers Market drivers –– Environmental legislationsEnvironmental legislations

More legislation ...and higher demands

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© Alfa Laval 3

www.alfalaval.com

Market Market drivers drivers –– FFuel prices spread and developmentuel prices spread and development

Price graph high sulpher versus low sulpher fuel

Jan Dec Dec

2010 2011

400

500

600

700

800

900

1 000

1 100

US

D/t

on

BW380 BWDI

Price difference

For 2020 estimated

at 400 USD/ton

(Source: POTEN & PARTNERS 2010)

High Sulpher Low Sulpher

(Based on average value 20 ports)

*Note: Nov 9 2012 BW380 = $622 and BWDI = $974 (Bunkerworld)

www.alfalaval.com© Alfa Laval Slide 8

Market driversMarket drivers–– IMO’s energy savings regulations IMO’s energy savings regulations

Source: “Estimated CO2 emissions reduction from introduction of mandatory technical and operational energy efficiency measures for ships” (2011) by Lloyds Register and DNV.

Ship Energy Efficiency

Management PlanSEEMP =

World fleet – Average scenario: A1B and B2-1

3 500

CO

2 (m

illto

nnes)

3 000

2 500

2 000

1 500

1 000

500

0

2010 2015 2020 2025 2030 2035 2040 2045 2050

World fleet CO2 level projections (average of A1B-4 and B2-1 scenarios)

EEDI reduction

SEEMP reduction

New emission level

BAU CO2 emission

transport workEEDI =

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19/11/2012

© Alfa Laval 4

www.alfalaval.com

Treatment systems on-board

� New built vessels from 2009/2012

� Existing vessels after 2014/2016

“USCG has “aligned” rules to IMO, and already in force”

Ballast water treatmentBallast water treatment–– legislationlegislation

www.alfalaval.com

Ballast water treatmentBallast water treatment–– 36 36 countriescountries havehave ratifiedratified and 30 and 30 neededneeded

*Note: convention requires minimum 30 countries representing 35% of the World tonnage

− Albania

− Antigua & Barbuda ~0.7%

− Barbados

− Brazil ~0.5%

− Canada ~0.5%

− Cook Islands

− Croatia ~0.2%

− Denmark

− Egypt ~0.3%

− France ~0.9%

− Iran

− Kenya

− Kiribati

− Lebanon

− Liberia ~9.5%

− Malaysia ~0.9%

− Maldives

− Marshall Islands ~1.3%

− Mexico ~0.2%

− Mongolia

− Montenegro

− Netherlands ~1%

− Nigeria

− Niue

− Norway ~4.2%

− Palau

− Republic of Korea ~1.1%

− Russia ~1.5%

− Saint Kitts & Nevis

− Sierra Leone

− South Africa

− Spain ~0.4%

− Sweden ~0.5%

− Syria

− Trinidad and Tobago

− Tuvalu

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Ballast water treatmentBallast water treatment–– onlyonly 29% of the World 29% of the World fleetfleet has has ratifiedratified

− Panama (22.6%)− Greece (5.3%)− Bahamas (5.0%)− Singapore (4.8%)− Malta (4.4%)− China (3.5%)

35% needed

% of fleet

71%

29%

Ratified Not ratified

65%

29%

6%

*Note: convention requires minimum 30 countries representing 35% of the World tonnage

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© Alfa Laval 5

www.alfalaval.com

Ballast water treatment marketBallast water treatment market–– until now, before ratificationuntil now, before ratification

� 15-20% of contracted vessels were specified with BWT systems in 2011 – 2012

� 10% of systems sold were for retrofit 2011 - 2012

Accumulated number of BWT systems soldall suppliers

0

200

400

600

800

1000

1200

1400

1600

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

20102009 2011 2012

Q2 Q3

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Ballast water treatment marketBallast water treatment market–– development over time, rough estimatedevelopment over time, rough estimate

“Issues discussed”

� Ratification date and USCG

� Time plan

� Exceptions

Source: Alfa Laval analysis

Yearly No of BWT systems ordered

0

1000

2000

3000

4000

5000

6000

7000

8000

New buildings Retrofit Time line

TodayTotal market

next 10 years: ~ 35 000 ships

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Market potential Market potential –– BWTBWT

� Alfa Laval estimates that 35,000 ships will be affected over a ten-year period. About 15,000 newly built and 20,000 existing.

� Estimated average order value per ship: EUR 200-250,000 over time.

� Alfa Laval has and intends to keep a market leading position.

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© Alfa Laval 6

www.alfalaval.com

Alfa Laval Alfa Laval PureBallastPureBallast–– A market leading positionA market leading position

� First prototype installed 2003

� First system to receive “type approval” in 2008

� Preferred choice by major shipowners

AOT reactor

FilterCIP unit

www.alfalaval.com

www.alfalaval.com

* ECA – Emission Control Area

0.1%

4.5%

3.5%

1.5%

1.0%

0.5%

World

EU in ports

ECA

Review forfuel availability

Su

lph

ur

co

nte

nt

SOSOX X emissions requirementsemissions requirements–– IMO IMO conventionconvention ratifiedratified

Reacheable by using low sulphurfuel or treatmentsystem

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© Alfa Laval 7

www.alfalaval.com

Alfa Laval PureSOAlfa Laval PureSOXX–– technical overviewtechnical overview

Scrubber

Water cleaning system

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Alfa Laval Alfa Laval PureSOPureSOXX

� 21 MW installation in

operation since June 2010.

� 28 MW installation starting up

Q4 2012

� Systems from 1 ~ 80 MW

available to cover all ship

sizes in the market

� Recently commercially

launched and available for all

sizes for both new buildings

and retrofit

11

22

33

66

77 44

8855

www.alfalaval.com

Market potential Market potential –– SOxSOx

� Alfa Laval estimates that 5,000 ships will be affected, i.e. ships sailing >50 percent in the Northern European ECA. In this group, Alfa Laval focuses on bigger, and newer existing vessels as well as newly built ships, representing 1,000-2,000 ships over a five-year period.

� Alfa Laval PureSOx, average order value per ship: EUR 2-3 million.

� Alfa Laval intends to take a market-leading position.

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© Alfa Laval 8

www.alfalaval.com

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NONOX X emissions requirementsemissions requirements–– IMO IMO conventionconvention ratifiedratified. . TierTier III for new III for new buildingsbuildings onlyonly

0

2

4

6

8

10

12

14

16

18

0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200

Tier I Year 2011, TierII (Global) Year 2016, Tier III (NOx Emission Control Areas)

NO

Xlim

it, g

/kW

h

Rated engine speed, rpm

2011: 15-22% reduction(Global)

2016: 80% reduction(ECAs)

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Alternatives Alternatives for NOfor NOXX reductionreduction–– IMO’sIMO’s tiertier III III conventionconvention requiresrequires a a technicaltechnical solutionsolution

Selective Catalyst Reduction(SCR)

Exhaust Gas Recirculation (EGR)

Alfa Laval PureNOX

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© Alfa Laval 9

www.alfalaval.com

Dieselengine

NOX reductionExhaust gas recirculation

(EGR)Scrubber

Cleaning

Cleaning

Technology/system Technology/system overviewoverview–– EGR, EGR, oneone of of twotwo technologiestechnologies

SOX reductionExhaust gas cleaning

Fresh or seawater

EGC

Scrubber

Steam (Boiler)

www.alfalaval.com

InstallationsInstallations

MAN’s test engine in Copenhagen (7.5 MW)

On board- Alexander Maersk- APMM 6S80ME-C9-EGR2 (23 MW)

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© Alfa Laval 10

www.alfalaval.com© Alfa Laval Slide 28

Waste Heat RecoveryWaste Heat Recovery–– saving >10% fuel for large shipssaving >10% fuel for large ships

Radiation0.6%

Exhaust gas25.4%

Scavenge air14.1%

Jacket water6.3%

Lubricating oil4.3%

Radiation0.6%

Exhaust gas12.6%

Scavenge air12.9%

Jacket water6.2%

Lubricating oil4.2%

Condenser8.6%

Electric power5.9%

Shaft power49.0%

Total power54.9%

Diesel engine with waste heat recovery

Shaft power49.3%

Standard diesel engine

Heat balance example for RTA96C diesel engine – ISO conditions, 100% load

www.alfalaval.com© Alfa Laval Slide 29

Waste Heat RecoveryWaste Heat Recovery–– saving >10% fuel for large shipssaving >10% fuel for large ships

Radiation0.6%

Exhaust gas25.4%

Scavenge air14.1%

Jacket water6.3%

Lubricating oil4.3%

Radiation0.6%

Exhaust gas12.6%

Scavenge air12.9%

Jacket water6.2%

Lubricating oil4.2%

Condenser8.6%

Electric power5.9%

Shaft power49.0%

Total power54.9%

Diesel engine with waste heat recovery

Shaft power49.3%

Standard diesel engine

Heat balance example for RTA96C diesel engine – ISO conditions, 100% load

www.alfalaval.com

Waste Heat RecoveryWaste Heat Recovery–– after main enginesafter main engines

Yearly savings, ex

� Fuel oil ~4 000 tonnes*

� CO2 ~12 000 tonnes

� Fuel: MUSD 2.4

*Container vessel with WHR’s producing 3 MW power. Ex. typical investment MUSD 4,2 and annual savings MUSD 2,4

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© Alfa Laval 11

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Yearly savings

� Fuel oil ~100 tonnes

� CO2 ~300 tonnes

� Fuel: KUSD 60

Waste Heat RecoveryWaste Heat Recovery–– after auxiliary engines introduced in 2012after auxiliary engines introduced in 2012

*Container vessel with 3 MW gen sets installed. Ex. typical investment KUSD 100 and annual savings KUSD 60

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Market potential Market potential –– WHRWHR

� WHR for main engines: this is an already existing market. Alfa Laval’s current volume is approximately EUR 30-40 million per year.

� WHR for auxiliary engines: This is a new product. Many oceangoing vessels could benefit from this type of solution. Price level around EUR 70,000.

www.alfalaval.com

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© Alfa Laval 12

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PureBilgePureBilge and and PureDryPureDry–– integrated system for oily waste and fuel recoveryintegrated system for oily waste and fuel recovery

� Recovers up to 2%

fuel

� Certified for 5 ppm

(only HSS system)

www.alfalaval.com

Up to 2% fuel lostUp to 2% fuel lost

Waste oil tankThe sources

Fuel oil 20-30%

Oil polluted water, 70-80%

Suspended solids, ~1%

Service tanks Automatic FO filters

Injector pumps Purifiers

www.alfalaval.com

PureDryPureDry–– waste fuel recoverywaste fuel recovery

2012

1 st Engineer Ulf Nyberg - The first operating PureDry system in the worldM/S Silja Symphony

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© Alfa Laval 13

www.alfalaval.com

The technologyThe technology–– Unique combination of decanter and high speed Unique combination of decanter and high speed separator technology creates unique resultsseparator technology creates unique results

XCavator

Separator insert

Superdrysolids

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Market potential Market potential –– PureDryPureDry

� Alfa Laval expects to sell 100 units in 2013. Over time this product will be attractive to most oceangoing vessels.

� The price level of this product is >EUR100,000.

� Alfa Laval is alone in the market with this product

www.alfalaval.com

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© Alfa Laval 14

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“Optimizes customer processes”“Optimizes customer processes”

PureDry recovers more than 150 tonsof fuel oil onboard Silja Symphony

PureDry Case Study: Silja Symphony April 2012

In November 2010, the Baltic ferry MS Silja Symphony installed PureDry,

a new high-speed separator from Alfa Laval with the capability to recover re-

usable fuel from waste fuel oil. Symphony´s Chief Engineer Mats Göras relates

that since commissioning, the PureDry unit has revocered more than 150 m3 of

oil, which has been returned to the bunker tanks for re-use. ”With bunker oil at

today´s prices, this has meant a significant reduction in fuel costs for us, ”says

Göras, “we have also cut our costs for landing waste oil.”

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� Aalborg acquisition has strengthened our position

� Leading position in solving environmental needs

and saving energy and CO2

� We are continuously bringing new innovations to the market

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© Alfa Laval 15

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