[ English ]April 2024

Our initiatives

As reducing GHG emissions becomes an urgent issue for the international society, themaritime industry is facing increasingly stringent pressure to reduce GHG emissions
from ships, and the IMO and the EU are strengthening environmental regulations.
In 2023, the IMO revised its GHG Strategy. Under this strategy, new regulations which
may incur additional costs to reduce GHG emissions are expected to be introduced,

with the goal of achieving net-zero GHG emissions from international shipping by oraround 2050. In addition, the strategy considers the life cycle GHG emissions of fuels
used onboard ships, expanding the focus beyond just energy efficiency improvement
to include the ”origin” of the fuels.
Meanwhile, the EU has extended the “EU Emissions Trading System (EU-ETS)” to theshipping sector ahead of international regulations by the IMO. Furthermore, the“FuelEU Maritime”, which assesses the life cycle GHG emissions of fuels, will start in

2025. Both regulations impose financial burdens to reduce GHG emissions from ships,
making strategic GHG emissions reduction a key element for the future of themaritime business.

1

In this regulatory landscape, long-term measures such as the introduction of zeroemission fuels ships are essential for the planned reduction of GHG emissions.
However, the infrastructure for supplying zero-emission fuels is still underdevelopment, requiring the introduction of various GHG reduction measures during
the transitional phase.

GHG reduction measures for ships include the introduction of alternative fuels ships,
energy efficiency improvement technologies such as wind-assisted propulsion
systems and energy-saving devices, etc. and the use of onboard CCS for capturing
and storing CO2 emitted from ships. Regardless of these measures, monitoring of
GHG emissions is essential through a suitable management tool.
ClassNK aims to comprehensively facilitate a smooth transition to zero-emission
through its "ClassNK Transition Support Services," utilizing the knowledge gained

from participating in various demonstration projects for energy efficiency
improvement technologies, onboard CCS and GHG emissions verification as well as
issuing an Approval in Principle (AiP) for alternative fuels ships. This service offers acomprehensive menu of solutions to support clients in reducing GHG emissions andproposes optimal strategies tailored to clients’ needs.
ClassNK encourages stakeholders to utilize its "ClassNK Transition Support Services"to successfully reduce GHG emissions.

2ClassNK Transition Support Services menu

Alternative fuels support(Ammonia/Methanol/LNG/LPG/Biofuel)Introduction support
Technical support
Operational support

TrendsSafety requirements
Newbuilding ships / retrofit support
Operation / crew training support
Usage of biofuel

556Fuel certification

Certification support

Certification of GHG reduction effects

6Certification of methane slip actual values

Energy efficiency improvement support
Energy efficiency
improvement support

Estimation of energy efficiency improvement
effects
Support for introducing energy efficiency
improvement technologies

7

Onboard CCS support
Introduction support
Certification support

3Trends
Safety requirements
Certification of captured CO2 volume

88

GHG emissions management support
GHG emissions
management toolClassNK MRV Portal
ClassNK ZETA

9- Appendix -Understanding regulations
International Maritime
Organization (IMO)

European Union (EU)Whitepaper “Pathway to Zero-Emission inInternational Shipping”
FAQs on the EU-ETS for Shipping
FAQs on the FuelEU Maritime

10104

Alternative fuels support( Ammonia / Methanol / LNG / LPG / Biofuel )A key step in reducing GHG emissions from ships in the future is the transition from conventional fuels
to zero- or low-emission alternative fuels. With the construction of ships using LNG and methanol asfuel and the upcoming introduction of ships fueled by ammonia, the introduction of alternative fuels
ships is expected to increase.
ClassNK provides comprehensive support services for clients who are considering the introduction,
design, construction and operation or conversion of alternative fuels ships.

Introduction support
TrendsWhen introducing alternative fuels, it is necessary to consider not only technical evaluations but also tounderstand trends including cost and supply availability. ClassNK provides the latest information on various
alternative fuels intended for onboard ship use, covering cost estimations including regulatory compliance,
fuel supply forecasts and ordering status for alternative fuels ships.

Safety requirements
For alternative fuels ships, the development of safety requirements thatconsider the risks to ships, crews and the environment has become apressing issue at the IMO. ClassNK supports the introduction of alternativefuels ships through the publication of its “Guidelines for Ships Using
Alternative Fuels,” which provides guidelines on the safety requirements andthe design of alternative fuels ships, ahead of the IMO's formalized safety
requirements for such ships.

Technical support
Newbuilding ships / retrofit support
For newbuild ships using alternative fuels or retrofitting existing ships with alternative fuels systems, ClassNK
provides technical support for obtaining Approval in Principle (AiP) and facilitating retrofits, utilizing ourknowledge as a classification society.

5Operational support
Operation / crew training support
As the number of alternative fuels ships rises, international standards and unified guidelines for handlingcertain fuels like ammonia and methanol onboard, as well as crew training, remain absent. ClassNK supports
the operation of alternative fuels ships by issuing guidelines for alternative fuels operations and relevantcrew training requirements. Additionally, leveraging our expertise in alternative fuels, we offer
comprehensive support for crew training, including e-learning modules covering alternative fuels operations
and training necessities that might be challenging to develop internally.

Usage of biofuel
Biofuels are increasingly recognized as carbon-neutral options due to the CO2absorption by the plants used in their production. They are also considered
drop-in fuels, compatible with existing engines without major conversions.
ClassNK facilitates the usage of biofuels by offering guidance through the"Technical Guide for Using Biofuels," outlining their features and usage
considerations. Moreover, we provide certification aligned with international
biofuel certification schemes, ensuring their safe and effective use.

Certification support
Fuel certification
The demand for certification of biofuels and green fuels produced
sustainably is increasing. ClassNK offers third-party certification foralternative fuels used onboard ships, adhering to the certification
scheme. We offer a comprehensive service covering fuel certification andcertification of emissions reduction achieved through fuel used,providing clients with a convenient one-stop solution.

Certification of GHG reduction effects
The use of biofuels and green fuels leads to a decrease in GHG emissions in comparison to conventionalfuels. As a third-party organization, ClassNK certifies the reduced GHG emissions stemming from the use ofbiofuels, etc., in line with ISO standards, GHG protocol, and other relevant criteria. Acquiring certification for
reduced GHG emissions enables clients to demonstrate the effectiveness of GHG reduction to stakeholders.

Certification of methane slip actual values
In recent years, with the increasing use of LNG fuel, there has been mounting concern about the impact of
methane slip on global warming, as it releases unburned methane into the atmosphere. ClassNK certifies theactual methane slip values for engines using LNG fuel. Obtaining certification for these actual values enables
shipowners and other stakeholders to demonstrate the reduction of GHG emissions.

6Energy efficiency improvement
supportEnhancing the energy efficiency of ships is crucial for reducing GHG emissions. Key technologies for
improving energy efficiency include wind-assisted propulsion systems, air lubrication systems, energysaving devices, propeller retrofits, and optimal operation support systems. By enhancing operational
efficiency and decreasing fuel consumption, these technologies effectively reduce GHG emissions.
Moreover, they offer avenues for GHG emissions reduction without necessitating major conversions
like fuel changes.
ClassNK supports clients in evaluating the potential impact of energy efficiency improvement andfacilitates the introduction of these technologies, from assessment to introduction.

Energy efficiency improvement support
Estimation of energy efficiency improvement effects
When introducing energy efficiency improvement technologies, it's crucial to anticipate the expected
improvement effects beforehand. ClassNK assists in estimating the CO2 reduction effects and theimprovement in the CII rating resulting from the introduction of these technologies.

Support for introducing energy efficiency improvement
technologies
Energy efficiency improvement technologies like wind-assisted propulsion systems, air lubrication systems,
energy-saving devices, propeller retrofits, and optimal operation support systems yield varying energy
efficiency effects. Additionally, the availability of these technologies depends on the hull form and ship type,which may impose limitations. ClassNK supports clients in evaluating energy efficiency improvement byoffering support for the introduction of these technologies on each ship. This includes considering theenergy efficiency impacts of each technology in conjunction with the ships’ hull form/type.

7Onboard CCS support
There is a rising interest in capturing CO2 from ship exhausts to reduce GHG emissions. Onboard
Carbon Capture and Storage (CCS) technology is advancing, although still emerging, and lacks
comprehensive international regulations. Nevertheless, ClassNK has engaged in onboard CCS
demonstration projects, leveraging gained insights to provide services for its future introduction.
ClassNK assists clients considering onboard CCS introduction by providing trends, conducting safetyassessments, and certifying the amount of CO2 captured.

Introduction support
TrendsClassNK provides information to facilitate the introduction of onboard
CCS, encompassing insights into implementation trends as well as
details on regions, facilities, and storage capacities for captured CO2.

Safety requirements
Internationally recognized safety standards for onboard CCS systems
andinstallations

arecurrentlylacking.

ClassNKsupports

theintroduction of onboard CCS by publishing resources like the"Guidelines for Shipboard CO2 Capture and Storage Systems" which
delineate essential safety requirements for both equipment andinstallation pertaining to onboard CCS.

Certification support
Certification of captured CO2 volume
As a third-party, ClassNK certifies the actual amount of CO2 captured by onboard CCS. The certification ofthis captured CO2 volume enables stakeholders to appreciate the reduction in CO2 emissions.
Moreover, ClassNK assists in ensuring that the CO2 reduction achieved through onboard CCS is duly
recognized within both IMO and EU regulatory frameworks.

8

GHG emissions management support
GHG emissions management is mandatory regardless of the measures taken to reduce GHG emissions,such as the use of alternative fuels or the introduction of energy efficiency improvement technologies.
To facilitate compliance with regulations such as IMO-DCS and EU-MRV, ClassNK offers the "ClassNK
MRV Portal," a comprehensive tool for certification and regulatory compliance. This platform verifies
GHG emissions for specific periods or individual voyages/cargo units upon request. Additionally, weprovide "ClassNK ZETA," a visualization tool designed to support managing fleet emissions by offering
insights into GHG emissions. As a GHG certification service, we also evaluate the extent to which aclient's shipping operations align with their GHG emissions reduction targets.

GHG emissions management toolClassNK MRV Portal
ClassNK supports compliance with fuel oil consumption data collection systems like IMO-DCS/EU-MRV andCII rating by offering the "ClassNK MRV Portal." This platform serves as a data repository for storing andmanaging voyage data and vouchers sent from ships.
ClassNK offers extensive support, including templates
for data collection, reporting, and shore-based datamanagement, as well as assistance with certification
application, DOC issuance, and invoice management.
ClassNK can also verify GHG emissions and issue
certificates

forspecificperiods

orindividual

voyage/cargo units upon client request, facilitating their
sharing among stakeholders.

ClassNK ZETAClassNK ZETA supports clients in their efforts to reduce GHG emissions by offering a comprehensive tool for
visualizing and effectively managing emissions from ships. This platform enables clients to monitor GHG
emissions and CII ratings of individual ships or entire fleets, aswell as simulate potential changes in emissions and ratings
resulting from practices like slow steaming. In addition tothese GHG management capabilities, to assist with compliancewith EU regional regulations, we provide a feature supporting
EU-ETS. This feature facilitates the confirmation of GHGemissions subject to the EU-ETS and the management ofemission allowances. Furthermore, a feature for FuelEU
Maritime will soon be incorporated to further enhance
regulatory compliance support.

9-Appendix-

Understanding regulations

In 2023, the IMO revised its GHG Strategy, with new regulations for reducing GHG emissions slated for
introduction in 2027. Concurrently, the EU has initiated the extension of the EU Emissions Trading System(EU-ETS) to the shipping sector since 2024, with the introduction of FuelEU Maritime scheduled for 2025.
Understanding these regulations is crucial for devising measures to reduce GHG emissions from ships.
To facilitate comprehension and compliance, ClassNK has published informative documents elucidatingthese regulations and offering guidance for preparation. These documents will be regularly updated toreflect any revisions to the regulations.

International Maritime Organization (IMO)
Whitepaper “Pathway to Zero-Emission in International Shipping”
In an effort to enhance comprehension of the 2023 IMO GHG Strategy, ClassNK has released a white paper
titled "Pathway to Zero-Emission in International Shipping - Understanding the 2023 IMO GHG Strategy."
While the 2023 GHG Strategy establishes numerical targets and benchmarks for GHG
emissions reduction, there remains a lack of consensus regarding the interpretation ofthese targets within the realm of international shipping. The white paper analyzes the"life cycle GHG emissions" that international shipping is allowed toachieve these numerical targets, as well as the scale of "zero-emission
fuels and zero-emission ships" required to meet these targets,
including comparisons with the current situation.

European Union (EU)FAQs on the EU-ETS for Shipping
ClassNK published the “FAQs on the EU-ETS for Shipping”, which provides an overview
of the EU-ETS for the shipping sector and the necessary preparations ina Q&A format to assist maritime stakeholders through the essential
preparations required for compliance with the EU-ETS, facilitating theirinitial steps toward regulatory compliance.

FAQs on the FuelEU Maritime
ClassNK published the “FAQs on the FuelEU Maritime”, which provides an overview ofthe FuelEU Maritime and the necessary preparations in a Q&A format
to assist maritime stakeholders through the essential preparations
required for compliance with the FuelEU Maritime, facilitating theirinitial steps toward regulatory compliance.

10

[ English ]Planning Division
Green Transformation Center
4-7 Kioi-cho, Chiyoda-ku, Tokyo 102-8567, JAPANTel:+81-3-5226-2031
E-mail: gxc@classnk.or.jp

www.classnk.com
April 2024