MISC Integrated Annual Report 2020

MISC GROUP TOTAL ENERGY CONSUMPTION 2016 2016 2017 2017 2018 2018 SO x SO x 2018 2018 2019 2019 NO x NO x MISC Group Total SO x & NO x Emissions (tonnes) MISC Fleet SO x & NO x Intensity (gram pollutants/1000 ton-nm) 2019 2019 2020 2020 2020 2020 MISC Fleet Total Refrigerant Consumption (tonnes) MISC Group ODS Consumption (tonnes) 3.50 3.45 1.81 1.76 2.11 39,126 49,519 29,484 46,720 63 73 41 66 61 5 36,053 3,240 Almost 100% of Group’s SO x & NO x emissions are from shipping operations AIR EMISSIONS Under the new global IMO 2020 Global Sulphur Cap limit which came into effect on 1 January 2020, ships will have to use fuel oil on board with a sulphur content of no more than 0.50% m/m, against the current limit of 3.50%. MISC is fully compliant with this by changing our fuel to low sulphur fuel and LNG, as well as having retrofitted a number of vessels with scrubbers. MISC has recorded a significant reduction in SO x and NO x intensity as a result of the various intiatives that we have implemented. We have a higher proportion of natural gas consumption in our energy mix. Another significant factor is since 2018, the newbuild vessels in our fleet have been fitted with lower NO x emission engines. MISC has been implementing an Ozone Depleting Substances (ODS) Programme as follows: • Removal of ODS by switching to non-ODS refrigerants on vessels and offshore floating assets • Implementing Refrigerant Management Procedures onboard vessels and offshore assets • Tracking and regular monitoring of refrigerant consumption During the year, there were no significant changes in shipping refrigerant consumption compared to the 2016 baseline. A total of 98% of refrigerants used on our vessels were of the non-ozone depleting type. As for ODS consumption, we recorded a 40% reduction by 2020, compared to the 2016 baseline. ENERGY EFFICIENCY MISC recognises the importance of adopting energy efficient practices to reduce our dependency on natural resources and non- renewable energy. This approach will play a key role in the Group achieving our carbon emission reduction strategy. We have in place an Energy Efficiency Reduction Programme for both the shipping and non-shipping aspects of our operations. In 2020, an additional two vessels were installed with the Propeller Boss Cap Fin energy saving device where the refinements in the vessel’s fin shape and height enables enhanced propeller thrust and reduced torque, which should lead to fuel savings of between 2% and 5%. We continue to maintain advanced low friction anti-fouling paint on selected vessels to reduce hull friction by weakening the capability of marine organisms to attach to the coated surface. This correlates to the projection of 4% to 6% reduction in the fleet’s carbon emissions emissions. In 2018, we had upgraded our vessel performance monitoring and analysis system 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. Continuous improvements to our vessels as a result of our Energy Efficiency programmes will also improve our performance in the years to come. All of our vessels built in 2013 onwards have a better Energy Efficiency Design Index (EEDI) than mandatory requirements. For our newer vessels in 2020, the average EEDI is 3.77 gCO 2 per ton-nm. With each ship having its individual Energy Efficient Management Plan, we are also well placed to continue with our upward trajectory on operational optimisation. As for non-shipping operation, seven buildings at MHB’s yard have been selected to be installed with total of 8 MWp solar power capacity to generate electricity. The installation is targeted to be completed in early 2021 with an estimated RM8.5 Million cost savings over a period of 21 years. To date, more than 126 LED lights have been installed in our maritime academy, ALAM’s campus and will continue to replace the conventional light with energy savings lights. MISC Group has significantly increased its energy efficiency (EE) since strengthening on EE initiatives in 2016. This is evident by the improvements in carbon emissions intensity of our fleet between 2016 to 2020 as shown in Greenhouse gas emission section. In 2020, our energy consumption had shown a reduction of 8.5% compared to 2016. WASTE MANAGEMENT Waste from Vessels Reducing waste is a key part to lowering our environmental footprint. In this regard, we are proud to share that in 2020 almost 100% of the hazardous waste generated from our non-shipping operations are either recycled, reused or recovered. Waste management for our shipping operations is governed by MARPOL as stipulated by the IMO. All of our vessels have a garbage management plan in place to ensure that the waste that was produced are managed in a responsible manner and in compliance with the requirements under MARPOL. Waste separation is carried out on board. Recyclables and all wastes collected are sent to shore reception facilities for onwards recycling, treatment, recovery or disposal, while waste which are permitted for on board incineration are disposed in the shipboard incinerator. The only waste that is allowed to be disposed at sea is food waste, and the disposal is carried out in compliance with the MARPOL requirements. 2016 2017 2018 2019 2020 62,553,237 56,502,860 57,381,720 57,861,007 57,264,392 GJ EMISSIONS — REFRIGERANT MANAGEMENT AND OZONE DEPLETING SUBSTANCES (ODS) SOx and NOx EMISSIONS ODS ODS Substitute 2.74 10 9 11 12 11 1.93 0.54 0.15 0.22 OPERATING SAFELY AND SUSTAINABLY ///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 218 MISC Berhad / Integrated Annual Report 2020 7 219 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section