"K" Line

Today, the 210,000-dwt ton capesize bulker “CAPE BROLGA” which had been under construction at Tsu shipyard of Japan Marine United Co., Ltd., has been delivered to Kawasaki Kisen Kaisha, Ltd. (“K” LINE).

The vessel has been built by adopting the original energy-saving propulsion devices made by Japan Marine United Corporation and the vessel’s accommodation which has consequently reduced the resistance of drag caused by oncoming wind. (*1) She is expected to reduce fuel consumption by these devices and low wind resistance accommodation, compared to conventional vessels and growing the obtainable deadweight. It is a state-of-the-art ship that gathers world-class technology among capesize bulk carriers.

Additionally, in order to improve the resistance towards corrosion of the cargo holds of the vessel, a specific cargo hold corrosion-resistant steel (JFE-SIP®-CC) (*2) for coal developed by JFE Steel Corporation has been adopted.

She will be engaged in the carrying of iron ore and coal transport for JFE Steel Corporation under a long-term consecutive voyage charter contract.

With plenty of vessels of various types and sizes (from very large to small), “K” Line offers its customers a unique range of transport services. “K” Line will remain agile in actively responding to the diversifying needs for shipments of both ore and other iron-bearing raw materials.

Vessel Particulars

Main Measure  :  LOA 299.99M × Width 50.00M ×Depth 25.00M × Draft 18.40M

Deadweight  :  211,982 T

Gross Ton   :  108,605

Main Engine   :   Hitz MAN-B&W 7S65ME-C-8.5-HPSCR

Speed  :  14.3KTS

Class  :  NK

Flag : Japan

Builder  :  Japan Marine United Corporation

(*1) Super Stream Duct®, SURF-BULB®, ALV-Fin®, which are able to reduce fuel consumption compared to conventional equipment, are installed near the propeller, and LEADGE-BOW®, which has a shape that reduces resistance from waves on the bow has been adopted.

Energy saving devices | Hydrodynamic engineering | Technology development | Japan Marine United Corporation (jmuc.co.jp)

(*2) JFE-SIP®-CC: Corrosion Resistant Steel for Coal Cargo Holds

JFE Steel Corporation | Plates | Corrosion-Resistant Steel Plate for Shipbuilding (jfe-steel.co.jp)

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) is pleased to announce that we have signed “Transition Linked Loan (TLL)” with syndicated lenders, arranged by Mizuho Bank Ltd. (MHBK), in accordance with the “Transition Linked Finance Framework (Framework)” which is based on “K” LINE Environmental Vision 2050(R1), announced September 6^th, 2021.(R2)

In this TLL’s finance scheme, we have set 3 sustainability performance targets (SPTs) in line with our transition strategies for decarbonization and linked them with a prefixed loan interest matrix. This scheme brings us incentives on our decarbonization activities as well as accelerating and contributing to the global goal for decarbonization.

This TLL is our second transition finance (“Purpose Unspecified Finance”) since our 1st transition loan (“Purpose Specified Finance”) in March 2021(R3). “K” LINE is the first company to originate two consecutive transition finances (Purpose Specified / Unspecified) in short term in Japan. Furthermore, the loan amount is one of the largest scales among ESG loans which is based on a policy by the Loan Market Association.

In order to promote this “Transition Linked Finance” continuously, “K” LINE has received certification from Japan Credit Rating Agency, Ltd. (JCR) (R4) for the compliance with “Basic Guidelines on Climate Transition Finance” by Ministry of Economy, Trade and Industry and related guidelines and policies.

This TLL is also selected as a model case for transition finance by the Ministry of Economy, Trade and Industry. Outline of the finance is as follows.

<Outline of the finance>

※Details of SPTs

①Total yearly GHG emissions throughout all loan term

②Yearly CO2 emissions per ton-mile throughout all loan term

③“A-” rating or higher by CDP rating

All above SPTs are connected with a matrix table of loan interest and this promotes our transition strategy. 

<References>

(R1) “K” LINE Environmental Vision 2050 – Blue Seas for the Future –

https://www.kline.co.jp/en/csr/environment/management/main/00/teaserItems1/0/linkList/0/link/K-LINE_E-vision_en_2020_v2.pdf

(R2) Released on September 6, 2021: Newly formulated Transition Linked Finance Framework

https://www.kline.co.jp/en/news/csr/csr4178814345199333215/main/0/link/210906EN.pdf

(R3) Released on March 12, 2021: First Climate Transition Finance in Japan

https://www.kline.co.jp/en/news/car/car-7503535198498277982/main/0/link/210312EN2.pdf

(R4) Japan Credit Rating Agency, Ltd. (JCR) website

https://www.jcr.co.jp/en/

※ “K” LINE Group, as a participant in the United Nations Global Compact, is promoting

activities that contribute to SDGs (Sustainable Development Goals), and this TLL is a part of its ongoing activities.

(https://www.un.org/sustainabledevelopment/

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) has received a Special Award for Safety and Smart Environment for Seafarers (SSS) sponsored by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for the “K”ARE program (Note 1) to promote instilling “Non-Technical Skills” into seafarers.

Special Award for Safety and Smart Environment for Seafarers is an award system implemented as part of the initiatives in the 11th Basic Plan for the Prevention of Seafarers’ Accidents, and is designed to prevent seafarers’ occupational accidents, safe operation, health management, and labor support for ship owners, seafarers, and related parties. The purpose of this project is to contribute to the improvement of the working environment for seafarers as well as the prevention of accidents involving seafarers and marine accidents by commending the excellent efforts as the ” Special Award for Safety and Smart Environment for Seafarers ” and promoting the dissemination and utilization of such initiatives. The “K”ARE program was evaluated as one of the excellent initiatives.

“K” LINE continues to make efforts for maturing the organizational safety culture through the improvement of “Non-Technical Skills” and provide safe, sustainable, and high-quality transportation services that contribute to society.

(Note 1) “K”ARE program: https://klinelnguk.com/continuous-improvement/

Through the “K”ARE program, everyone in the “K” LINE group both onboard and ashore will share its societal mission and values, and develop a truly open culture where each individual can naturally demonstrate leadership regardless of title or background. “K”ARE program has been introduced since this April, utilizing Norway based SAYFR’s insight and gamified learning apps.

Announced on 28 – April 2021: Introduction of the “K”ARE program

https://www.kline.co.jp/en/news/csr/csr388536082780195320/main/0/link/210428EN.pdf

Progressing towards 2030 Interim Milestones and Action Plan for Low-Carbonization

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) has decided to procure eight 7,000 units class car carriers fueled by LNG (liquefied natural gas) by FY2023 to FY2025, following our first LNG-fueled vessel, “CENTURY HIGHWAY GREEN” which was delivered on March 12, 2021.“K” Line has made an agreement to order the new next-generation of environmentally friendly car carriers from NIHON SHIPYARD CO., LTD., SHIN KURUSHIMA DOCKYARD CO., LTD., and

CHINA MERCHANTS JINLING SHIPYARD (NANJING) CO., LTD, two vessels in each of three shipyards.

Next-generation of environmentally friendly vessels are expected to reduce emissions of carbon dioxide (CO2), which is a greenhouse gas (GHG), by 25% to 30%, emissions of sulfur oxides (SOx), which cause air pollution, by almost 100%, and emissions of nitrogen oxides (NOx) by 80% to 90% with use of LNG fuel and EGR（Exhaust Gas Recirculation）, compared to conventional vessels using heavy fuel oil.

In “K” LINE Environmental Vision 2050 (Note1), we have set the 2030 interim target of improving CO2 emission efficiency by 50% over 2008, surpassing the IMO target of 40% improvement. We are planning to substitute LNG fuel and other new fuels for conventional heavy fuel oil to achieve the targets set forth.

In accordance with “K” LINE Environmental Vision 2050, we will flexibly and proactively listen to customer demands including environmental issues and find the best solution to contribute to the sustainable development of the society.

Please refer to the following releases related to LNG-fueled vessels :

• March 2021:

The first Car Carrier fueled by LNG has been delivered to K” LINE.

https://www.kline.co.jp/en/news/car/car753727087818379669/main/0/link/210312EN1.pdf

• July 2021:

Released Signing of the first Consecutive Voyage Charter for a LNG-fueled Capesize Bulk Carrier

https://www.kline.co.jp/en/news/drybulk/drybulk8599282089888261624/main/0/link/210720EN.pdf

• September 2021:

“K” LINE to procure 8 Next-generation Environmentally Friendly Car Carrier

References

EEDI and Regulations of SOx and NOx

https://www.kline.co.jp/en/csr/environment/regulation.html

(Note 1) “K” LINE Environmental Vision 2050 “Blue Seas For the Future”

https://www.kline.co.jp/en/csr/environment/management.html#002

Kawasaki Kisen Kaisha, Ltd. (“K” Line) is pleased to announce that it has reached an agreement with GYXIS Corporation (GYXIS) to enter into a Time Charter contract based on a new Kawasaki Heavy Industries, Ltd.－built 86,700㎥ LPG Fueled VLGC (Very Large Gas Carrier) for LPG/Ammonia Transport.

“K” Line has placed an order for our first LPG fueled LPG/Ammonia carrier to Kawasaki Heavy Industries, Ltd. and the vessel will be delivered from their Sakaide factory in 2023.

The vessel will be equipped with LPG dual fuel system and reduce the emissions of CO2 by approx. 20%, SOx by 90 to 100%, and NOx by 10 to 15% with LPG fuel mode in comparison with existing VLGCs.

Moreover, the vessel will be given the excellent design to maximize the fuel efficiency and perform more 30% of CO2 emission reduction in the Energy Efficiency Design Index (EEDI) which fully meets the reduction target of the International Maritime Organization (IMO). (Note1)

Furthermore, the newly ordered vessel is also designed to transport Ammonia which draws attention as a zero-emission fuel, and as one of the methods to transport Hydrogen.

According to “K” LINE Environmental Vision 2050 (Note2), we are addressing reduction of Greenhouse Gas(GHG) with the cooperation of customers and all of the concerned parties.

Outline of the Vessel

LOA   : approx. 230.00 meters

Breadth   : approx. 37.2 meters

Depth  : approx. 21.9 meters

Tank Capacity : 86,700 m3

(Note1) EEDI and Regulations of SOx and NOx https://www.kline.co.jp/en/csr/environment/regulation.html

(Note 2) “K” LINE Environmental Vision 2050, which is formulated in 2015. Based on the revision in June 2020, our milestone target is set to [improve CO2 emission efficiency by 50% over 2008], which is surpassing the IMO target of a 40% improvement.

https://www.kline.co.jp/en/csr/environment/management.html#002

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) is pleased to announce that we have formulated a “Transition Linked Finance Framework (Framework)” which is based on “K” LINE Environmental Vision 2050(R1). With using this Framework, we plan to finance “Transition Linked Loan (TLL)” at the end of September 2021.

In order to promote this “Transition Linked Finance” continuously, “K” LINE has got certification of “Basic Guidelines on Climate Transition Finance” by Ministry of Economy Trade and Industry and related guidelines and policies for this TLL by Japan Credit Rating Agency, Ltd. (JCR)(R2).

This TLL is also selected as “Example model of Climate Transition Finance of the 3rd year of Reiwa era” by Ministry of Economy Trade and Industry of Japan.

This TLL is our second transition finance (“Purpose Unspecified Finance”) since our 1st transition loan (“Purpose Specified Finance”) in March 2021(R3). “K” LINE is the first company who originates two consecutive transition finances (Purpose Specified / Unspecified) in short term in Japan and we believe these finances contribute to decarbonization. Outline of the finance is as follows.

Outline of finance

※Details of SPTs

①Total yearly GHG emissions throughout all loan term

②Yearly CO2 emissions per ton-mile throughout all loan term

③“A-” rating or higher by CDP rating

All above SPTs are connected with a matrix table of loan interest and this promotes our transition strategy. 

References

(R1) “K” LINE Environmental Vision 2050 – Blue Seas for the Future –

http://www.kline.co.jp/en/csr/environment/index.html

(R2) Japan Credit Rating Agency, Ltd. (JCR) website

https://www.jcr.co.jp/en/

(R3) Released on March 12, 2012: First Climate Transition Finance in Japan

https://www.kline.co.jp/en/news/car/car-7503535198498277982/main/0/link/210312EN2.pdf

(R4）“K”LINE SUSTAINABILITY BOOKLET (published English version in July,2021)

https://www.kline.co.jp/en/csr/group/booklet.html

※ “K” LINE Group, as a participant in the United Nations Global Compact, is promoting

activities that contribute to SDGs (Sustainable Development Goals), and this TLL is a part of its ongoing activities.

(https://www.un.org/sustainabledevelopment/)

KAR Logistics Perú S.A.C. (KAR Peru), a 50-50 joint venture company between Kawasaki Kisen Kaisha, Ltd. (“K” Line) and Agencias Universales Perú S.A. (AGUNSA Peru), has started full scale automobile logistics business around Lima, Peru in June 2021. Although there was a temporary decrease in sales due to the COVID-19, we anticipate that automobile sales and imports will improve and expand in the medium to long term. In order to meet the increasing demand for services associated with the transportation of finished vehicles, KAR Peru will provide comprehensive logistics services for finished vehicles to importers and dealers.

In 2017, we established KAR Logistics S.A., a joint venture with local logistics company Agencias Universales S.A.( AGUNSA) which handles total logistics services in Chile(R1) and other South and Latin America, to start automobile logistics business in Chile. By utilizing the experience and know-how gained in Chile, “K” Line established KAR Peru with AGUNSA Peru, a subsidiary of AGUNSA to expand our business in South and Latin America.

“K” Line Group places “Logistics Business” as a stable profit-making sector in its “Management Plan,”(R2) and by following this strategy, “K” Line is further enhancing its Automobile Logistics Business that is already in operation in Indonesia, Thailand, Vietnam, Philippines, Singapore, Australia, Brazil, Mexico and Chile. “K” Line will continue to make every effort and do its best for achieving maximum customer satisfaction by utilizing its many years of experience and know-how in sea transportation by Pure Car Carrier vessels.

Rayomar Group, business partner of Kawasaki Kisen Kaisha, Ltd. (“K” Line) in Philippines, (Note1), started COVID-19 vaccinations for its employees and staff at “K” Line Maritime Academy Philippines (Note2) with approval from Department of Health (DOH) and Pasay City.

Vaccinations are mainly conducted by “K” Line Clinic operated by a member of Rayomar Group which provides medical services for “K” Line seafarers in Philippines.

In Philippines, vaccinations are slowly progressing. But in order to ensure a stable supply of seafarers to sustain maritime transportation that supports the infrastructure of our daily lives, “K” Line will continue to promote vaccinations for seafarers on managed vessels and staffs working at affiliated companies at sea and shore.

(Note 1) In 1989, “K” Line has established a manning company in Philippines as a joint venture with our business partner, RAYOMAR MANAGEMENT INC, to recruit Filipino seafarers and provide to our fleet.

Raymor Management Inc Web Site　：　https://www.rayomar.com.ph/

(Note 2) “K” Line Maritime Academy Philippines, “K” Line Group’s training facility for seafarers in Philippines, accepts a total of 10,000 trainees a year, and as one of the major pillars supporting “safe ship operation and environmental protection”, which is the foundation of our business, “K” Line is securing and training high-quality seafarers on a stable basis.

Kawasaki Kisen Kaisha, Ltd. (hereinafter ”K” LINE) and Chubu Electric Power Co., Inc (hereinafter Chubu Electric Power) have entered into a Joint Development Agreement (JDA) with DP Energy, a renewable energy developer headquartered in Ireland, for the Uisce Tapa Tidal Energy project (hereinafter the Project) in Nova Scotia, Canada.

This project will be the first tidal energy project in which a Japanese company will participate overseas.  In this Project three underwater turbine generators are planned to be installed in the Bay of Fundy, Nova Scotia, Canada, with the aim to start operation of the first turbine in 2023. The project holds a 15-year Power Purchase Agreement of 530 CAD/MWh awarded with Nova Scotia Power Incorporated and is recipient of approximately 30 million CAD grant from Natural Resources Canada.

JDA is limited to contribution of development cost. After FID, the first turbine would be installed.

Chubu Electric Power will contribute to the realization of carbon-free society by developing renewable ocean energy and so on as one of the measures to achieve the “Zero Emissions Challenge 2050”.

“K” LINE Group is promoting its efforts to reduce greenhouse gas (GHG) emissions in accordance with its “K” LINE Environmental Vision 2050. In addition to promoting its own decarbonization, “K” LINE Group will contribute to the realization of a carbon-neutral society by supporting the decarbonization of society through developing renewable ocean energy.

Comments

“Uisce Tapa Tidal Generation would be a trigger Project to utilize ocean energy contributing to the global decarbonization.” said Hiroki Sato, Executive Officer, Corporate Planning & Strategy Division at Chubu Electric Power.

“Through this Project, “K” LINE aim to contribute to in the business that supports the decarbonization of society while utilizing our experiences accumulated in the field of international marine transportation together with partner companies.” said Satoshi Kanamori, Executive Officer, in charge of LNG, Carbon-Neutral Promotion at “K” LINE.

Project Information

(1) Tidal Power Generation

Power generation method which utilize the kinetic energy of the tidal current and generally converts it into rotational energy with a water wheel to generate electricity.

Uisce Tapa Tidal Energy project

*1　The Bay of Fundy is one of the largest tidal range in the world. The maximum difference of tidal marks is approximately 16meters.

(3) About DP Energy

Please be advised that “K” Line Tokyo Head Office published the following press release today.

Please see the attached PDF documents or click the following website links to read the reports.

・Financial Highlights for 1st quarter FY2021

・Notice on Differences between Consolidated Financial Forecasts for the Fiscal Year ending March 2022

https://www.kline.co.jp/en/ir/library/presentation.html