MISC Annual Report 2019

In 2019, DNVGL provided external assurance for all our vessels trading within EU ports. The assurance certifies that all the vessels’ fuel consumption and CO 2 emissions report covering the reporting period 2018 were found to be satisfactory in compliance with the requirements of Regulation (EU) 2015/75 - MRV (Monitoring, Reporting and Verification). Our 2019 CO 2 emissions reported by all our vessels will be subjected to external assurance by DNVGL in accordance with IMO DCS (Data Collection System on fuel consumption) by end of March 2020. MISC also fully supports the use of cleaner fuels which will reduce the amount of SOx and NOx emitted from ships. As of 2019, our LNG Asset Solutions and Petroleum & Product Shipping segments showed improvements in SOx and NOx intensity. The NOx improvements can be attributed to the increase in more efficient vessels in our fleet of which our newer vessels are capable of complying to the most stringent IMO Tier III emissions. For our Seri C vessels, compliance to the most stringent NOx standards are achieved through the installation of Selective Catalytic Reduction (SCR) system and for our LNG dual-fuel Aframax vessels, through lean homogenous combustion characteristics of its engine when on gas mode. Improvement in SOx emission is contributed by our switch to cleaner fuels i.e. LNG and low sulphur compliant fuels. We strive to use non-ozone depleting refrigerants, in line with our commitment to phase out Ozone Depleting Substance (ODS) while continuing to monitor ODS and refrigerant consumption at all MISC facilities. This is in addition to implementing Refrigerant Management Procedures in all our vessels. Today, almost 99% of refrigerants used on our vessels and 87% of the refrigerants used across the Group are non-ozone depleting. There has also been a significant 50% reduction in the consumption of ODSs in 2019 compared to 2016. The total shipping refrigerant consumption was also reduced by 9% in 2019, compared to 2016 despite an increase in vessel activity. • MISC fleet SOx intensity reduced by 35% in 2019 compared to 2018 Energy Efficiency To reduce dependency on natural resources and non-renewable energy, MISC understands the importance of adopting energy efficient practices. We also recognise that this will support us in our carbon emission reduction strategy. One of our initiatives involved the installation of Propeller Boss Cap Fin energy saving devices on 30 of our vessels. Refinements in the vessel’s fin shape and height resulted in enhanced propeller thrust and reduced torque, which should lead to fuel savings of 2-5%. We also painted 11 vessels with advanced low friction anti-fouling paint to reduce hull friction by weakening the capability of marine organisms to attach to the coated surface. This will result in a 4 – 6% reduction of carbon emissions. All vessels also receive regular hull and propeller polishing which is carried out based on performance monitoring and condition assessment. The vessel performance monitoring and analysis system was upgraded in 2018 by adopting DNVGL’s Navigator and Eco Insight monitoring and reporting tool. This customised software has improved data accuracy through improved monitoring and enhanced performance analysis, enabling informed decisions to be made to improve vessel energy efficiency performance. Additionally, to enhance our energy efficiency commitment and performance, our petroleum fleet has been ISO 50001:2018 Energy Management System certified. The certification ensures that our fleet consistently abides by systems and processes for energy management, to achieve continual improvement of energy performance. The ISO standards will be rolled out to the LNG fleet in 2020. Waste 0.145 0.149 0.048 0.052 0.019 0.077 LNG Petroleum Product SOx Intensity (gSOx/tonne-nm) 0.030 0.022 0.085 0.081 0.237 0.226 LNG Petroleum Product NOx Intensity (gNOx/tonne-nm) Management Discussion & Analysis 2018 2019 2018 2019 MISC Group ODS Consumption (tonnes) MISC Fleet Total Refrigerant Consumption (tonnes) 3.50 3.45 1.81 1.76 9.68 2.74 10.52 9.34 11.19 1.93 0.54 0.15 2016 2017 2018 2019 2016 2017 2018 2019 Effective 1 October 2018, except for events where safe drinking water supply is not available or may not be sufficient, disposable plastic drinking bottles are prohibited at all events organised by the company. These include meetings, trainings and conferences held internally and externally, and employees are required to make arrangements for bottled water free events by working with the venue provider to serve water in pitchers or water dispensers. In 2019, we continued to monitor and ensure compliance of our operations with respect to the prohibition. Complementing it was the discontinuation of the use of single use plastics on all our vessels in 2019 together with the installation of drinking water filtration kits throughout the MISC fleet as an alternative method to avoid purchase of disposable plastic bottles. As a means to reduce paper consumption, MISC has progressively embarked on a digital signature programme for internal documents that require approval signatures. MISC partnered with DocuSign to allow its employees to conveniently obtain and deliver digital signatures and thus reduce the need for printing. Our offshore business unit initiated a fabric recycling movement by adopting two fabric bins and in just one month, 200 kg of clothes were collected and shared with Kloth Cares to be sorted and graded to be donated to charitable organisations, exported to developing countries or recycled into industrial wiping cloths, upcycled garments or as fuel. There was also a 16% reduction in average garbage generation per vessel, compared to 2016. MISC Fleet Average Garbage Generation (m 3 per vessel) 2016 2017 2018 2019 72 79 68 61 Ratio Hazardous Waste Disposed (landfilled/incinerated) FY2016 0.08 FY2017 FY2018 FY2019 0.02 0.38* 0.01 * High disposal rate due to clearing of sludge and slops for the decommissioning of Techno Indah Sdn. Bhd. Reducing waste is a key part to lowering our environmental footprint. In this regard, we are proud to share that in 2019, almost 100% of our hazardous waste generated from our non-shipping operations are either recycled, reused or recovered. A significant amount of our hazardous waste generation comprises spent blasting materials generated from our shipyard operations in Pasir Gudang. Our spent copper slag waste is fully recycled into raw material for cement manufacturing while spent garnet is treated and recovered via an onsite facility to recover reusable garnet. Moreover, we continued to assess alternative environmentally friendly solutions to manage the spent blasting materials by continuing the collaboration with local universities to study the characteristics of the waste and find reliable and sustainable solutions for its management. ODS ODS Substitute Operating Safely and Sustainably • MISC fleet NOx intensity reduced by 10% in 2019 compared to 2018 145 144 OUR BUSINESS PERFORMANCE MISC BERHAD PEOPLE. PASSION. POSSIBILITIES ANNUAL REPORT 2019