Responsible traffic.

Bravely together.

LNG for Maritime Transport- Finnish perspective

Dr. Anita Mäkinen

Workshop on "Natural gas and biomethane as fuel for Transport, TEN-T days

Riga, Latvia 23 June 2015

Finnish Transport Safety Agency

LNG for Maritime Transport

Content• Why is it beneficial to use LNG as a fuel?

• National LNG Action Plan for shipping 2013 – 2017

• State Aid in Finland to promote environmentally friendly shipping

- State aid for vessels

- State aid for LNG infrastructure

• LNG fuelled ships

• Ports/terminals for LNG bunkering

• Summary

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Finnish Transport Safety Agency

WHY?

IMO and EU sulphur regulations

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IMO Studyon fuel availability (0.5 %)

2018

?(0.1 %)

SECAReg.

Finnish Transport Safety Agency24.6.2015 4

Emissions from alternative fuels(SOX, NOX, CO2, PM)

2000

4000

6000

8000

Finnish Transport Safety Agency

LNG Action Plan for shipping 2013 – 2017

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The Action Plan is prepared under the leadership of the Finnish Ministry of Transport and Communications is aimed at promoting the use of liquefied natural gas (LNG) in shipping on the basis of the following guidelines:

• focus resources on providing LNG bunkering in Finland, taking into consideration synergies with domestic industry and heavy vehicles, and the need for an EU-wide LNG infrastructure;

• examine the use of financial incentives, such as investment aid and guarantees for ship acquisitions, in the construction of LNG infrastructure and procurement of LNG-powered ships; and

• work actively at international level (IMO, EU and HELCOM) to promote the use of LNG as ship fuel, including efforts to establish LNG infrastructure and draft the associated regulations and guidelines, particularly for LNG bunkering.

• The Action Plan is quite detailed in activities needed to promote the use of LNG.

Finnish Transport Safety Agency

Investment aid scheme for environmentally friendly vessels in Finland

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Background

In Finland, we have considered that encouraging early investments in green shipping will benefit both the environment and help the industry to maintain its competitiveness.

• November 2010 – Aid scheme for new-builds (SA.32118)

• March 2013 – Amended scheme to include aid for early adaptation and for retrofitting operations (SA.35686)

• Granting authority: Ministry of Transport and Communications

Finnish Transport Safety Agency

Aims of the environmental investment aid

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• To encourage ship-owners to make environmentally friendly investments

• To speed up commercial use of environmentally friendly technology

• To simplify the adaptation to new emission requirements

- Especially SOx emissions

Finnish Transport Safety Agency

Main features of the environmental investment aid

• Incentive effect

o No binding contract before applying for the aid

o “5 years requirement” in calculating the eligible costs of the investment

• Maximum aid intensities from 15% to 70%

o The size of the company

o New build or retrofit investment

o Max. aid per vessel EUR 30 million

o Each individual aid exceeding EUR 7.5 million shall be notified to the Commission

• Only for vessels under the Finnish flag

Finnish Transport Safety Agency

Investment aid for retrofitting operations to vessels currently in use

• Scrubbers, MGO conversions, LNG conversions

• Investments needed to be completed before 1 January 2015

o New SOx regulations entered into force

o Aid scheme in force only until 31 December 2014

• 5-year requirement

• Eligible costs must be a calculated net of any operating benefits and operating costs related to the extra investment for environmental protection during the first 5 years of the investment

Finnish Transport Safety Agency

Granted environmental investment aid

• New builds, EUR 30 million

• M/S Viking Grace (2013), EUR 28 million (SA.33382)

• Dual-fuel diesel engines that use LNG as main fuel http://www.vikinggrace.com/

• M/S Meri (2012), EUR 2 million

• Special purpose vessel able to use 100% bio-oil http://www.meriaura.fi/en/special_purpose_vessels/meri

• Retrofitting operations, approx. EUR 20 million

• 1st call for applications: EUR 7.28 million / 13 vessels

• 2nd call for applications: EUR 12.62 million / 45 vessels

Finnish Transport Safety Agency24.6.2015 11

LNG fuelled ships

• Viking Grace (2013)o Trafficking between Turku – Stockholmo Bunkering only in Sweden from Seagull bunker vessel

• Coast Guard vessel”Turva” (2014)o Bunkering experience in many Finnish ports

• New Icebreaker (2015) for Arctia Shippingo First LNG fuelled ice breaker in the world

• TallinkGroup (2017)o Helsinki – Tallinn ro-ro ferry

with 2800 passengers

• Container ship’s fleet

Finnish Transport Safety Agency

Investment aid for LNG infrastructure

• The aim is to create a network of LNG terminals to enable large-scale use of LNG in maritime transportation

• Scheme adopted in Oct 2013

• EU notification under Art. 107(3)c of the TFEU

• Funding: EUR 123 million

• Granting authority: Ministry of Employment and the Economy

• Investment aid for LNG terminal

• Max aid intensity 40 %

• Investment aid for LNG infrastructure granted in 2014:

Tornio 33.2 million €

Pori Tahkoluoto 23.4 million €

Rauma 8.6 million €

Kotka/Hamina 28 million €

Finnish Transport Safety Agency

Finnish Ports and LNG availability

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ImportExport

Port of HaminaKotka (TEN-T core port) –in autumn 2018

Port of Helsinki (TEN-T core port)

Port of Turku, Pansio (TEN-T core port) –1 st stage ín January 2017

Port of Pori, Tahkoluoto – in 2016

Port of Rauma – in 2016

Port of Tornio, LNG Manga Ltd - in 2017

Finngulf LNG: Large scale import terminalof 340 000 m3 -> two: larger in Finland (Inkoo or Porvoo) and smaller in Estonia+ Baltic connector to connect these two

Finnish Transport Safety Agency

Summary on activities in Finland to promoteLNG for Maritime Transport

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• Governmental aid schemes for LNG fuelled ships and infrastructure

• National LNG Action Plan 2013 - 2017

• Some LNG fueld ships already trafficking – more in the pipeline

• LNG infrastructure in ports and terminals under development

• Finland is ready to implement the DIRECTIVE 2014/94/EU on the deployment of alternative fuels infrastructure concerning the use of LNG for Maritime Transport!

Responsible traffic.

Bravely together.

Finnish Transport Safety Agency

Kumpulantie 9, 00520 Helsinki

PO Box 320, FI-00101 Helsinki, Finland

Telephone +358 29 534 5000

www.trafi.fi

Thank you for your attention!