The Shareholders’ Newsletter #62 - Spring 2020

Environment : Total accompanies maritime transportation in its energy transition.

ENVIRONMENT

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Total accompanies maritime transportation in its energy transition.

In January 1, 2020, new regulations were introduced to reduce vessel sulfur oxide emissions: the Global Sulphur Cap (“IMO 2020”). Total is the second largest private global LNG player, and is accompanying maritime transportation in its energy transition by proposing more environmentally-friendly fuels along with the associated logistics.

At Total, teams from all the different sectors of activity have been working together for the last three years to prepare for the new Global Sulphur Cap 2020 (IMO 2020) regulations which took effect on January 1, 2020.

This new regulation requires that all vessels consume fuel with a sulfur content of no more than 0.5%(1), compared with the previous 3.5%. This marks a real revolution for all players in the global economy, since 90% of merchandise is transported by sea.

Total has a major role to play in this new configuration on two counts: first, as a user, because the Group uses maritime shipping lanes to transport and distribute its products worldwide and second, as a supplier, since the Group produces and markets marine fuels and lubricants.

Total has decided to promote the development of the Liquefied Natural Gas (LNG) as a marine fuel. LNG is currently the best available and technologically tried-and-tested solution to significantly reduce the environmental footprint of maritime transportation. Starting this year, the Group is to supply the nine new ultra-large container vessels owned by CMA CGM that operate between Asia and the Mediterranean, at a rate of 300,000 metric tons per year for at least ten years Total Marine Fuels Global Solutions has also signed a 10-year agreement with Pavilion Energy Singapore for the joint development of an LNG supply chain in the Singapore port.

In terms of logistics, Total is developing new infrastructures in the marine LNG sector, like the first large-capacity LNG bunker vessels chartered by the Group and which are currently under construction. The first of these vessels will be delivered in early 2020 and operate in Rotterdam. The second is slated for 2021 and will be positioned in the port of Marseille-Fos in France. Both bunker vessels comply with the highest technical and environmental standards. 

The Group is therefore able to offer fuels and services across the entire oil and gas chain, to its customers in the shipping industry. The Marketing & Services branch has adapted its product offer. Refining & Chemicals has defined new production criteria and adapted its tools. Trading & Shipping has found bunkering solutions in areas where Refining & Chemicals does not have any refineries. Lastly, Gas, Renewables & Power is making sure that LNG is available in the ports where demand is high. An integrated approach that gives Total a considerable competitive edge.

(1) Except for Sulphur Emission Controlled Areas (SECA) where sulfur content is limited to 0.1%.

The properties of LNG as a marine fuel

Compared to ships currently powered by fuel oil, using LNG as a marine fuel results in a reduction of:

  • 99% of sulfur oxide emissions.
  • 99% of fine particles emissions.
  • Up to 85% of nitrogen oxide emissions.
  • About 20% of greenhouse gas emissions.

The Energy Efficiency Design Index (EEDI) which measures a ship’s environmental footprint, improves by 20% compared with a conventional vessel.