Greener Skies 2007 29-30 March, Hong Kong

1. Greener Skies 2007 29-30 March, Hong Kong REDUCING AVIATION’S ENVIRONMENTAL IMPACT How fuel can help Mike Farmery Global Fuel Technical and Quality Manager

2. What can you expect over the 30 minutes? • A plea from the heart • Summary of aviation’s environmental impact • Identification of areas where fuel can help • A review of the issues around bio fuels • A chance to ask interesting but relatively straightforward questions

3. Is Powerpoint slide production sustainable ? No of slidesperpresentation 100 Source : McKensey 10 1 1990 2010 2000

4. GreenPoint™ confirm that > 50% of the following slides come from recycled sources ICAO Workshop, Sept 2006 Geneva, April 2006 IATA FUEL FORUMLisbon, May 2006 Aviation SeminarFeb 2007 CAAFI Workshop, Atlanta, Oct 2006

5. Where are we? • A plea from the heart • Summary of aviation’s environmental impact • Identification of areas where fuel can help • A review of the issues around bio fuels • A chance to ask interesting but relatively straightforward questions

6. What is the effect of aircraft emissions?

7. We apologise for interupting the presentation but someone in the audience would like to ask a question……….. Please ask Question A

8. Aviation’s produces only ~2% of man-made CO2 but its environmental impact is under the spotlight Aviation’s impact estimated at 2.5x basic CO2 effect due to cirrus, contrails and NOx EU wants to include Aviation in Emissions Trading Local air quality is a major factor limiting Heathrow airport expansion – NO2 levels main issue but particulates also on the agenda

9. Aviation emissions • CO2 • NOx • Soot/particulates • CO • VOCs • SOx

10. Aviation emissions have local and global impact Local air quality x      Global climate    x x  • CO2 • NOx • Soot/particulates • CO • VOCs • SOx

11. Aviation emissions Local air quality x      Global climate    x x  • CO2 • NOx • Soot/particulates • CO • VOCs • SOx Where can fuel help?

12. Where are we? • A plea from the heart • Summary of aviation’s environmental impact • Identification of areas where fuel can help • A review of the issues around bio fuels • A chance to ask interesting but relatively straightforward questions

13. Aviation emissions - How fuel can help Higher engine temps Better efficiency Better energy density • CO2 • Soot/particulates • SOx Renewable source Lower aromatics Lower sulphur Lower sulphur

14. In Aviation fuel solutions are limited – not much scope for special fuels • Long lifetime and high capital cost of aircraft – kerosine is preferred jet fuel for next 30 years • Focus on safety means lead times for fuel or additive development are long (~10 years) • Airlines don’t like aircraft that need special fuel • Little incentive for OEMs to develop aircraft/engines running on a special high performance or alternative fuel • Local alternative fuel solutions common in ground transportation fuels only applicable to General Aviation • Hydrogen would need completely new aircraft and infrastructure

15. Aviation is a very special global industry – but not much scope for special fuels • Long lifetime and high capital cost of aircraft – kerosine is preferred jet fuel for next 30 years • Focus on safety means lead times for fuel or additive development are long (~10 years) • Airlines don’t like aircraft that need special fuel • Little incentive for OEMs to develop aircraft/engines running on a special high performance or alternative fuel • Local alternative fuel solutions common in ground transportation fuels only applicable to General Aviation • Hydrogen would need completely new aircraft and infrastructure Any new or alternative aviation fuel for the short to medium term must be a drop-in replacement

16. The XTL process Anything-to-Liquids (XTL) is a process that converts carbon & energy containing feedstock to ultra-clean fuels and speciality products via the Fischer-Tropsch synthesis process natural gas, coal, biomass, waste… Long chain paraffins finished XTL products synthesis gas CO + 2H2 syngas manufacture Fischer-Tropsch synthesis hydro- processing & separation • refinery/chemical products: eg • LPG • naphtha • kero • gasoil • base oils • chemicals • wax cleaning & conditioning oxygen O2 air air separation H2O

17. The XTL process Anything-to-Liquids (XTL) is a process that converts carbon & energy containing feedstock to ultra-clean fuels and speciality products via the Fischer-Tropsch synthesis process natural gas, coal, biomass, waste… Long chain paraffins finished XTL products synthesis gas CO + 2H2 syngas manufacture Fischer-Tropsch synthesis hydro- processing & separation • refinery/chemical products: eg • LPG • naphtha • kero • gasoil • base oils • chemicals • wax cleaning & conditioning oxygen O2 air air separation H2O Kero is same regardless of feedstock and has no memory of where the carbon/hydrogen came from

18. We apologise for interupting the presentation but someone in the audience would like to ask a question……….. Please ask Question B

19. Synthetic kerosine is great turbine fuel Better thermal stability - hotter engines Zero aromatics - reduced soot emissions Low luminosity flame - longer engine life Zero sulphur - engine life, emissions Good energy density - better range?

20. The US Military are are very keen on synthetics • Performance benefits in military jet engines • Less engine smoke (smoking affects your stealth) • Less dependence on imported oil (big Government push) • Good diesel fuel (single battlefield fuel) • Suitable for fuel cells • Based on coal (Appalachians don’t have hurricanes)

21. Better thermal stability would allow engines to run hotter and hence more efficiently 20 deg C estimated to give 0.1% improvement in SFC Inadequate thermal stability causes deposits and blockages in fuel systems Current engines are pushing the thermal stability of both fuels and lubricants to the limit The engine equivalent of cholesterol

22. We can improve thermal stability by processing and additives GTL kero Jet A-1 + APA 101 Hydrotreated Jet A-1 Merox Jet A-1 Breakpoint ºC 250 275 300 325 350

23. Current position with synthetics • SASOL CTL paraffinic kero approved up to 50% dilution in conventional kero (at JNB) • SASOL going for approval of 100% fully synthetic kero using synthetic aromatics from same process • Likely that specifications will allow FT paraffinic kerosines up to a similar 50% within 1-2 years • Low volumes will mean 50% approval adequate for short/medium term • Blends give supply benefit but may not give all the performance benefits

24. Shell is a leader in GTL technology and we are working to quantify the benefits to aviation Integrated world scale Qatar project based on proven technology developed over past 30 years

25. Aviation emissions - How fuel can help Higher engine temps Better efficiency GTL, CTL Better energy density • CO2 • Soot/particulates • SOx Renewable source Lower aromatics GTL, CTL Lower sulphur Lower sulphur – but is there a technical case?

26. THE SULPHUR DEBATEor, as the English would say,“There’s no ‘f’ in sulfur”

27. Soot,particulates sulphur Contrails Cirrus SO2 Sulphur – the issues map Global warming Airportair quality High altitude Costs CO2 penalty Environmental Desulphurisation Pipeline interfaces Thermalstability Distribution Fuel system Impacts filtration Lubricity Other fuels Engine Sulphur in jet fuel Turbine corrosion(sulphidation Desulphurisationcapacity Winterdieselblending Spec limits Average levels

28. At the moment there is no overriding technical case for reducing sulphur in jet fuel • Clear case for auto fuels – eg catalytic convertors, diesel particle traps • Implicated in contrails etc but models are a bit wobbly • Some work being done to quantify impacts in engines • Local air quality and particulates may end up the main driver

29. Aviation emissions - How fuel can help Higher engine temps Better efficiency GTL, CTL Better energy density • CO2 • Soot/particulates • SOx Renewable source Lower aromatics GTL, CTL Lower sulphur GTL, CTL or Hydrotreatment Lower sulphur

30. Aviation emissions - How fuel can help Higher engine temps Better efficiency GTL, CTL Better energy density • CO2 • Soot/particulates • SOx Renewable source ???????? Lower aromatics GTL, CTL Lower sulphur GTL, CTL or Hydrotreatment Lower sulphur

31. Greenhouse Gases (CO2 equivalents) Use of products Transport to users Potential Potential Production of products Extraction of feedstock (Engine Efficiency) (Process Efficiency) CO2 production well-to-wheel - GTL • Industry consensus on LCA studies showing that the GHG emissions of a GTL system is comparable to a modern, complex refinery system, it also has • significant lower impact on air acidification and smog formation • lower emissions of particulate matter • less hazardous waste production • Considerable efforts are focused on GTL process efficiency through focused R&D programs, targeting up to 20% efficiency improvements 100% 0 REFINERY GTL GTL GTL System - System - Shell sponsored life-cycle assessment by PricewaterhouseCoopers LLP in accordance with ISO14040 standards.

32. Where are we? • A plea from the heart • Summary of aviation’s environmental impact • Identification of areas where fuel can help • A review of the issues around bio fuels • A chance to ask interesting but relatively straightforward questions

33. Processing – Many routes to transport fuels …

34. … most unsuitable for aviation …

35. … the numbers say it all …

36. … of those with potential for Jet Need to produce hydrocarbons to be a drop-in replacement: • Fischer-Tropsch • Hydrotreating of Bio Oils. • Zeolite Cracking of Bio Oils. • Hydrotreating of Vegetable Oils. • Catalytic Cracking of Vegetable Oils. • Aqueous-Phase processing of sugar-derived feedstocks.

37. BTL kero – the future is green? Better thermal stability – hotter engines Zero aromatics – reduced soot emissions Low luminosity flame – longer engine life New molecules – Improved supply Renewable – Reduced CO2 footprint BUT IS THIS THE WAY TO BIOJET ? Very high cost of production plants Availability of biomass ? Cost of transport of biomass

38. BTL kero – the future is green? Better thermal stability – hotter engines Zero aromatics – reduced soot emissions Low luminosity flame – longer engine life New molecules – Improved supply Renewable – Reduced CO2 footprint SHELL - CHOREN JOINT VENTURE WILL BE WORLD’S FIRST BTL PLANT – START UP 2008, COMMERCIAL SCALE PLANT 2011 Shell is looking at the options BUT IS THIS THE WAY TO BIOJET ? Very high cost of production plants Availability of biomass ? Cost of transport of biomass

39. HYDROTREATING VEGETABLE OILA better option for aviation than FAME • Uses conventional type hydrotreating technology • Removes oxygen, hence good energy density • Kerosine produced is very similar to similar to GTL kero (low S, low aromatics) • Process is cheaper than BTL but feedstock more expensive • Need to find suitable carbon chain length oils • Principal issue for aviation is the availability and cost of a suitable vegetable oil – are algae the answer ?

40. Biomass – What to Use • Plant Biomass comes in 5 basic forms: • Lignocellulose (wood, wastes, switch grass) • Starches • Vegetable Oils • Terpenes (Rubber, Euphorbia) • Algae • The raw product cost increases down this list, but generally productivity and processing costs decrease.

41. Some crops are better than others..

42. The Future and bio-jet challenges • Reducing the feedstock cost in a world of increasing demand. • Finding bio material that has high growth rates, low production and cultivation costs, is cheap to process and has the right natural carbon chain length. • In processes other than FT, bio source has a potential for carry-over into final properties. • In addition there are the problems of land usage, economics of competition, monoculture and bio diversity issues. More

43. Aviation emissions - How fuel can help Higher engine temps Better efficiency GTL, CTL Better energy density • CO2 • Soot/particulates • SOx Renewable source ???????? Lower aromatics GTL, CTL Lower sulphur GTL, CTL or Hydrotreatment Lower sulphur

44. Aviation emissions - How fuel can help Higher engine temps Better efficiency GTL, CTL Better energy density • CO2 • Soot/particulates • SOx Renewable source Lower aromatics GTL, CTL Lower sulphur Is there a viable bio-jet option ? Not at the moment but many groups are working hard to find one GTL, CTL or Hydrotreatment Lower sulphur

45. Specifications will need to respond to new challenges from alternative fuels and environmental impact • No conclusion whether the ‘f’ in sulfur is a problem • Simple bio-fuels (FAMEs, ethanol) not attractive for bio-jet • CTL and GTL kero offer performance benefits plus new molecules. Need to find solution to CO2 esp for CTL (sequestration). BTL offers the benefits of synthetic kero with a CO2 bonus but currently economics look difficult • Other bio-options (HT veg oils) offer potential if suitable feedstocks can be found • Supply of biomass will be a major challenge – aviation is not the only game in town • The Holy Grail is a low cost biomass to hydrocarbon process – lots of groups are searching Summary

46. Where are we? • A plea from the heart • Summary of aviation’s environmental impact • Identification of areas where fuel can help • A review of the issues around bio fuels • A chance to ask interesting but relatively straightforward questions