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environment 2008

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Table of conTenTs

4 ToRM and the environment 5 shipping and the environment 6 climate strategy 2020 9 Global climate solutions 10 Global Warming 11 opportunities and Risks 12 environmental Management 12 Responsibilities 12 Training 13 InternalAudit 13 ExternalAudit 13 EnvironmentalData 14 environmental Impacts 14 Construction 15 Operation 15 EmissionstoAir 17 BottomPaint 17 HandlingofBallastWater 17 WasteHandling 19 UseofChemicals 19 TankCleanings 20 SafetyandPreventionofOilSpill 20 RecyclingofShips 21 onshore environment 22 emission accounts 22 ReportingGuidelines 23 EnvironmentalData 23 Emissions 24 about the Report 24 ReportScope 24 ConsumptionandEmissionsfromVessels 24 WasteHandling 24 OperationalAspects 24 AirplaneTravel 24 Offices 25 Vessels under Management 26 auditor’s Report

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TORMhasaresponsibilitytocontributetoglobalsus-tainabledevelopment-financially,sociallyandenviron-mentally.ThisresponsibilityformsanintegralpartofTORM’svaluesandtheCompanyhasalong-standingtraditionofensuringsustainabilityinitsbusiness.

In2008,TORMdefinedaCSRstrategyforthepurposeofsettingthecourseforitsworkoncorporatesocialresponsibilitythroughto2012.TheCSRstrategywaspreparedonthebasisofacomprehensivestakeholderanalysismappingoutthedemandsandwishesoftheCompany’slargecustomers,suppliers,collaborationpartners,NGOsandinvestors.TORMwillinitiateimple-mentationofthenewCSRstrategyin2009.

TheanalysisshowedthatrequirementstoTORM’sper-formanceinCSRarebecomingincreasinglyimportanttotheCompany’slargestakeholdersandhencealsotoitsabilitytodeliversatisfactorybusinessresults:

• TORM’senvironmentalandsafetyworkisanincreas-inglyimportantselectioncriteriontoseverallargecustomers,includingtheoilcompanies.

• NegotiablequotasfortheemissionofCO2arepossi-blewithinthenextfewyears,andifpasseditcouldhavelargeeconomicimplicationsfortheindustry.

• PotentialandcurrentemployeesareattachingincreasingimportancetoTORM’sCSRworkwhenconsideringhowattractivetheCompanyisasawork-place.

• AnincreasingnumberofinvestorsacknowledgetherelevanceofCSRtoensurelong-termshareholderreturn.

WhilethisstrategycoversallCSRissuesidentifiedbythestakeholders,andpinpointstheonesthataremostimportanttoTORM,includingasafeandattractivework-place,humanandemployeerightsandbusinessethics,itisevident,thatenvironmentalandclimate-relatedissuescontinuetobeaveryimportantfocusareaforbothTORMandtheCompany’scustomers.

TORM’senvironmentalachievementswererecentlyaknowledgedbyoneoftheCompany’smajorcustomers,BP,fromwhomTORMreceivedtheBPShippingCEO’sHSSE(HealthSafetySecurityEnvironment)Award2008inthecategory’OutstandingEnvironmentalAchievement’.

Initsmotivation,BPstatesthatespeciallyTORM’sproactiveenvironmentalprotection,integrationwithbusinessstrategyandcommitmentfromtopmanage-mentwillserveasinspirationforBPShippingintheirfutureHSSEefforts.

ForTORMitconfirmsthatdoingwellanddoinggoodisinseparable.

Inthebeginningof2009,TORMbecamethefirstDanishshippingcompanytoadopttheUN’sGlobalCompact.ParticipatingintheUNGlobalCompact,theCompanycommitsitselftoobserveandpromotethetenprinciplesoftheGlobalCompactandtoreportannuallyonimprovementeffortsandtheresultsofthiswork.TORM’snewCSRstrategywillenabletheCompanytoobservetheUN’sGlobalCompactandsetthecourseforitsfutureCSRworkasanintegralpartoftheCompany’soperations.

ToRM and The enVIRonMenT

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Rotterdam

New York39 kg CO2

39 kg CO2

39 kg CO2

39 kg CO2

39 kg CO2

CO2 emission per ton of transported goods

CO2 emission per ton of transported goods

Rotterdam-New York 6,250 km

685 kg CO2

3,356 kg CO2

175 kg CO2

Globalisationandenvironmentalissues,especiallycli-matechanges,arehighontheinternationalagenda.TORM’sbusinessisatthecentreofbothissues.Shippingistrulyaglobalactivity.Globaltradeiscon-stantlyincreasingandshippingaccountsformorethan90%ofalltransportationofgoods(IMO,2008)–fromsneakersandshirtstocoalandcrudeoil.Shippinghasanumberofenvironmentalimpactsofwhichthemostsig-nificantonesstemfromthevessels’consumptionoffos-silfuels(heavyfueloil,gasoilanddieseloil)forpropul-sion,electricityandheating.Ingeneral,themostimpor-tantenvironmentalaspectsofshippingare:

• Emissionsfromcombustionoffossilfuelscausingglobalwarming,acidification,smoganddepletionofnaturalfossilresources.

• Releaseofsubstancesfrombottompaintthatmayhaveatoxiceffectonhumanbeingsandecosystems.

• Dischargeofballastwater,whichmayaffectbio-diversityofthelocalmarineenvironments.

• Wastehandling.• Useofchemicals.• Spillsandlossofcargo.

ThesignificantresourcestreamstoandfromanaverageTORMvesselduringacalendaryearareillustratedonpageeight.

Theclimateisevenmoreboundlessthantradeandshipping,andmostscientistsagreethatglobalwarmingislargelyattributabletotheman-madeemissionofCO2andothergreenhousegases.Therefore,amongtheenvi-ronmentalaspectsofshipping,consumptionoffuelandend-of-pipeemissionreductionsarecurrentlythepri-maryareasofconcernforTORMandtheCompany’sstakeholders.

OnatypicalroutefromRotterdamtoNewYork,adis-tanceofapproximately6,000km,avesselemitsaround39kilosofCO2pertonoftransportedgoods.WiththesameCO2emission,othermeansoftransportationwouldonlybringthesametonoftransportedgoodstonearbyEuropeandestinations,asthefigureillustrates.

Althoughshippingbyfaristhemostenergy-efficientformoftransportwhencomparedtoplane,trainortruck,theglobalshippingindustryaloneaccountsfor843milliontonnes,or2.7%ofglobalCO2emissions,duetothesubstantialshareoftransportation(IMO,2008).Thisimpliesgreatresponsibilityontheshippingindustrytocontributetotheprotectionoftheenvironmentandclimate.

MaRTIn houlbeRG, GeneRal ManaGeR, MR opeRaTIons, ToRMWearemakingahugeefforttooperateinanenvironmentalsustainableway.Wenotonlycomplywithrulesandregula-tions-weoftengoonestepfurther.Forinstance,weintro-

ducedaCaliforniancoastline‘speedlimit’beforeitwasmadeanofficialrequirement.TobeattheforefrontlikethatcanbeacompetitiveadvantagetoTORMassuchrestrictionsarealreadyimplementedintoourproce-dureswhentheybecomeofficial.Thiswayofworkinghassimplybecomeanintegralpartofourculture.Forthatreason,itwasencouragingtoreceivetheBPShippingAwardforOutstandingEnvironmentalAchievement.

shIppInG and enVIRonMenT

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clIMaTe sTRaTeGy 2020

TORMhasaresponsibilitytocontributetoglobalsustainabledevelopment-financially,sociallyandenvironmentally.ThisresponsibilityformsanintegralpartofTORM’svaluesandtheCom-panyhasalong-standingtraditionofensuringsustainabilityinitsbusiness.

Shippinghasanumberofenvironmentalimpactsofwhichthemostsignificantonesstemfromthevessels’consumptionoffossilfuelsleadingtoemissionsofCO2whichcontributestoglobalwarming.

Climatechangeisaglobalchallenge,andTORMisconvincedthatsolutionsmustbeglobalaswell.TORMiscommittedtocontributetoglobalinitiativestoreduceemissionsandharmfulim-pactonthemarineecosystemfromtheshippingindustry,andtherefore,acknowledgestheneedtointroducestricterinternationalenvironmentalregulations.

TORMhasdefinedaclimatestrategy,whichoutlinestheCompany’slevelofambitiontowards2020.Theclimatestrategyhasbeensetaspartofthecorporatestrategy“GreaterEarningPower2.0”,andwillminimiseTORM’simpactontheclimatetothebenefitoftheexternalenviron-ment,businesstargetsandcompanyreputation.Additionally,theclimatestrategyincorporatesexpectedfutureenvironmentallegislationandthusfacilitatesthatTORMwillbecompliantwithupcomingregulation.

TheDanishshippingindustryhassetageneraltargetofa15%CO2reductionby2020.However,asoneofthemajorshipownersinDenmark,TORMhasanobligationtobearolemodelwithinthisareaandconsequently,weaimtoreachahighertarget.

TORM’sstrategicclimatetargetsfor2020are:

A reduction of CO2air emissions pr. vessel by 20% compared to 2008, corresponding to a reduction from 8.0 g/tonkm in 2008 to 6.4 g/tonkm in 2020.

• ThetargetincludesallSR,MR,LR1,LR2andBulkvesselsthatareintechnicalmanagementaswellasownedbyTORM.

• Tomeetthistarget,TORMwilldeployawiderangeofactivitiescoveringattitudeamongem-ployees,alternativemeansofpropulsion,technicaloptimisation,cargoheating,tankclean-ings,customerrequirements,voyageorders,andproceduresingeneral.

A reduction of CO2 air emissions at the office locations by 25% pr. employee based on consumption in 2008, corresponding to a reduction from 2.8 ton CO2/employee in 2008 to 2.1 ton CO2/employee in 2020.

• ThetargetincludesalloftheCompany’sofficefacilities.• Tomeetthistarget,theCompanywilldeployawiderangeofactivitiescoveringattitudeamongemployees,technicaloptimisationandinfluencinglandlords.

TransparencyandaccountabilityarekeyelementsinTORM’sclimatestrategy.TheCompanywillthereforeworktogetherwithbusinesspartnersandrelevantstakeholderstooptimisetheactivi-tiesthroughoutthevaluechainandreportonprogresstomeetthetargets.

Asignificantreductionofemissionscanbeobtainedfromoptimisingthehandlingofexistingequipmentandtrainingofemployeesonboardandashorethereforeconstitutesanotherkeyele-mentinthestrategy.

WhilereducingCO2emissionsisanimportantelementinTORM’senvironmentalefforts,theCompanywillcontinuetoaddresstheotherenvironmentalaspectsbothonboardandashore,suchasbottompaint,dischargeofballastwater,wastehandlinganduseofchemicals.

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Thisreportdescribescurrentandnear-termenviron-mentaltargetsandactivities.Tofulfilltheambitiouslong-termtargetofa20%reductionofCO2emissionsfrom2008to2020,TORMneedstoconstantlysearchforresource-conservingsolutions,andtherefore,monitorscloselythedevelopmentofimprovedequipmentandnewinnovativetechnologies.

Basedonthismonitoring,TORMmaintainsacatalogueofideasthathavenotyetenteredtheprojectphase.Foreachoftheideaslistedbelow,theCompanywillperformadditionalresearchandiftheanalysisshowsthatanideaissustainable,itwillbefurthersubstantiatedandeventu-allysetasanenvironmentaltarget.

Tosupportthelong-termtargetofa20%CO2emissionreduction,TORMwillinvestigatethefollowingideas:

Vessel peRfoRMance• Installationofelectronicenginesonnewvesselstoreduceoilconsumptionandoptimiseengineperform-ance.

• Testingofscrubberpollutioncontroldevicestoallowforuseofheavyfueloilwhilemaintaininglowemis-sionlevelsofNOxandSOxgasses.

• Installationofpropulsiontechnology,suchasskysailorotherequipment,whichutilisesalternativepowersources.

• Optimisationofcleaningofhullandpropeller.• Optimisationofequipmentonnewvesselstomaxim-iseengineefficiency,e.g.hullsandpropellers,flowguides,waterflows.

• Formfreightagreementswithvariablearrivaltimesforoptimisationofvesselsspeed.

• Definitionofbestpracticeinrelationtoenergyconsumption,suchascargoheating,tankcleaning,electricityusage.

• Applicationofbettertoolstomonitortheperform-anceofenginestoensurethatcrewshaveadequateinformationtooptimisevesselperformance.

onshoRe enVIRonMenT• Optimisationofcooling,ITandlightningtoreduceenergyconsumption.

• Targetedtrainingofkeyonshoreoperationalandtech-nicalstaffwithsignificantimpactonvesselperform-ance,e.g.routeplanning,tankcleanings,arrivaltimeandspeedsetting,hullcleaningsetc.

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Voyage information·Distance:64,804Nm·Tonkm:2,756,751,372(cargointons*distance)·Speed:13,7knot(seavoyageaverage)

Terminology and explanations

hfo: Heavyfueloil,typicallywhatremainsofthecrudeoilaftergasolineandthedistillatefueloilshavebeenextractedls hfo: HeavyfueloilwitharelativelylowcontentofsulphuroxideandthuslesspollutingthanregularHFOMdo/MGo: Marinedieseloilormarinegasolineoil,whicharerefinedoilproductsusedforinertgas,minorenginesandinmain

engineswherespecialrequirementsmustbeobserved,suchasinCalifornia,U.S.special garbage: Batteries,sensors,lighttubes,aluminium,inkcartridges,cobberandothermetalsother garbage to shore: Mainlyplastics,packaging,containers,clothsGarbage to sea: Uncontainedhouseholdwastesuchaskitchengarbage,wood,glas,crockery,noplasticsGrey sewage: Sewagefromsinks,nottreatedblack sewage: Sewagefromtoilets,typicallytreatedonboardbeforedischargechemicals for tank cleanings: IMOcompliantdetergentsslop: Residuefromtankcleanings,whichisdischargedashoreinappropriatefacility

ToRM MR Tanker·Length:183metres·Breath:32metres·Draft:12metresloaded·Cargocapacity:47,200tons·Staff:22persons

exhaust emissionsCO2:24,792tons 9.0g/tonkmSOx:440tons 0.16g/tonkmNOx:587tons 0.21g/tonkm

sewageGreysewage:1,602tonsBlacksewage:282tons

Tank cleaningsNo.ofcleanings:9Chemicals:1,373litresWater:2,053tons(dischargedoverboard)Slop:746tons(dischargedashore)

ballast waterNoofballastwaterexchanges:5

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Garbage to shorePlasticsincineratedonboard:2m3

Othergarbageincineratedonboard:8m3

Specialgarbage:300kgOthergarbage:41m3 Garbage to sea

Disposedatsea:22m3

sIGnIfIcanT ResouRce sTReaMs foR ToRM MR TankeR, aVeRaGe fIGuRes peR yeaR

fossil fuelsHFO:6,712tonsLSHFO:904tonsMDO/MGO:232tons

consumption split :75% forpropulsion12% forelectricityproduction11% forheatingcargo2% forinertingtanks

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Shippingandclimatechangeareglobalissues,andTORMisconvincedthatsolutionsmustbeglobalaswell.TORMiscommittedtocontributetoglobalinitiativestoreduceemissionsandharmfulimpactonthemarineecosystemfromtheshippingindustry,andthereforeacknowledgestheneedtointroducestricterinternation-alenvironmentalregulations.

InternationalshippingisnotcoveredbytheKyotoProtocol,whichaimsatreducingglobalgreenhousegasemissions.Instead,internationalshippingisregulatedbytheUnitedNations’InternationalMaritimeOrganization(IMO).UnderIMO,theMaritimePollutionConvention(MARPOL)withtheMarineEnvironmentProtectionCommittee(MEPC)hassetoutcertaintargetstoreduceharmfulemissionsofairpollutantsfromships;targetswhichmustbemetbyallshippingcompaniesaroundtheworld.IMOisworkingonfurtherreducingemissionsfromshipsandimprovingotherenvironmentalaspectsofshipping,andTORMfullysupportsthisworkasanindividualcompanyandthroughtheDanishShipowners’Association.

ThereiscurrentlynospecificinternationalregulationoftheCO2emissionsfromshipping.Asaglobalisedindus-try,itisimportantthatfutureregulationissetinterna-tionally,andinTORM’sviewthisisbestsecuredthroughIMO.Regionalornationalenvironmentalregulationwoulddistortinternationalcompetitionandcouldleadtoout-flaggingofshipstotheharmoftheenvironment.

InDecember2009,DenmarkwillbehostingtheUnitedNations’ClimateChangeConference(COP15),whichissettoconcludeaglobalclimateagreementafter2012,whenthecurrentKyotoProtocolexpires.Thesummitislikelytoincreasefocusonshipping’sroleinglobalwarming,asDenmarkisoneoftheworld’sleadingship-pingnations.

Global clIMaTe soluTIons

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Greenhousegasesareanaturalphenomenonandmakeupaboutonepercentoftheatmosphere.Theyactlikeablanketaroundtheplanet,orliketheglassroofofagreenhouse,andtrapheatandkeeptheearthsome30degreesCelsiuswarmerthanitwouldbeotherwise.

Buthumanactivitiesaremakingtheblanket‘thicker’byemissionofCO2fromtheburningofcoal,oilandnaturalgas.Farmingactivitiesaddtothatbyproducingaddition-almethaneandnitrousoxide,andsodosomelong-livedindustrialgasesthatdonotoccurnaturally.Thefinelybalancedandage-oldcarboncycle,inwhichCO2isabsorbednaturallyfromtheatmospherebyplantsandseasthroughphotosynthesis,cannolongerfollowsuit.Theenhancedgreenhouseeffectisthereforewarmingtheearth’ssurfaceandloweratmosphere,andthechangesarehappeningatunprecedentedspeed.

CO2isresponsibleforover60%oftheenhancedgreen-houseeffect,accordingtotheUN’sFrameworkConventiononClimateChange(UNFCCC).Thehighertemperature,knownasglobalwarming,bringschangestotheclimate,mostofwhichhavedetrimentaleffectsonthewaywelivetoday:

• Morestorms,tropicalcyclonesandheavyprecipita-tion.

• Moreheatwavesandincreasingdroughtproblems.• Increasedriskoffloodingduetorisingsealevelscausedbymeltingglaciersandicecaps.

• Reducedqualityandquantityoffreshwatersuppliesduetosalt-waterintrusionfromrisingsealevels.

ForTORM,changesinweatherconditionsaffectthebusinessindifferentways:

• Stormsandbadweatheratseacancreatemoredamagetoships,whichwillincreasemaintenanceandinsuranceexpensesinadditiontomoredaysspentindockleadingtofewerearningdays.

• Badweathermayleadtodelayedarrivalofshipsaswellaslatedischargeandloadingofcargoduetoportcongestionondayswithgoodweather,reducingtheoveralltonnagecarriedbyashipduringagivenperiod.

TORMaddressestheseissuesthroughcarefulrouteplanningwhichincludeweatherforecastsforuptosevendays,andtheprimaryoptionistoavoidthebadweatheraltogether.Ifvesselsarepositionednearaport,theywillproceedtoopensea.

Day-to-daymaintenancealsoplaysanimportantrolebecauseawell-keptvesselwithrunningmachineryisaprerequisiteforcomingunscathedthroughastorm.

Global WaRMInG

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In2008,TORMoperated65shipswithanaverageof5.4yearsofoperation.Itisthusoneofthelargest,mostmod-ernandtechnologicallyadvancedshippingfleetsintheworld,whichinitselfisakeyelementintheeffortstoreduceairemissions.However,theCompanystillinvestsinanumberofactivitiestobecomemoreenergyefficientanddecreaseemissionsfurther,ascustomersconsiderthisanincreasinglyimportantfactorintheirsupplierselection.

ThevastmajorityofCO2emissionsfromshipsoriginatefromfossilfuelsfromthevessels’engines.Correspondingly,fuelmakesupmorethanhalfofTORM’soperatingcosts.In2008,aonepercentreductioninfuelconsumptionwouldconstituteanannualcostsavingofaroundUSD3millionifallvesselsundermanagementwereincluded.

InitiativestolimittheenvironmentalimpactofTORM’sbusinessarethereforenotonlyaquestionofbeingagoodcorporatecitizen.Itgoeshandinhandwithbusinessper-formance,bothintermsofcostsavingsandasameanstoattractandretaincustomers,skilledemployeesandshowleadershiptowardspoliticaldecision-makers.

Thevolumeofshippingandtheensuingenvironmentaleffectsinvolveariskofattractingnegativepublicattention.TORMplaysaproactiveroleinworkingwithenergy,cli-mateandenvironmentalimpactsoftheshippingindustry.TheCompanywillcontinuetocommunicateopenlywiththesurroundingsocietyandotherstakeholdersabouttheenvi-ronmentalaspectsofshippingcomparedtoothermeansoftransportation.

MaIken ØdeGaaRd, Vp sTRaTeGIc cooRdInaTIon, TankeR dIVIsIon, ToRMEnvironmentandsafetyaretopofmindinallofouractivitiesbothonlandandatsea.Thebeautyofbeingconsciousabouttheenvironmentisthatitatthesametimemakesgood

senseintermsofbusiness.

AsconsumptionofbunkersforpropulsionbyfaristhebiggestenvironmentalimpactofTORM’sactivities-andthebiggestcost-itisobviousthatreducingconsump-tionofbunkersisamainconcernthatpermeatestheoperationofourvessels.

Thespeedofourvesselsisakeyfactortolimitthecon-sumptionofbunkers,whichmeanswestrivetoreducethespeedasmuchaspossiblewithoutcompromisingcontracts.Wearealsoincreasinglyfocusingonavoidingsailingunnecessarymilesbetweendifferentvoyages.Wearethereforetryingtogetasmuchinformationfromcli-entsaboutroutesanddestinationassoonaspossibleinordertoavoidredirectingourvessels.Thesamethinkinggoesforthecleaningofthetanks,whichalsohasaneg-ativeimpactontheenvironment.Themoreinformationwegetaboutthetypeofcargo,andthesoonerwegetit,themoreitmakesusabletoplanandoptimisetankcleanings.Inotherwords,protectingtheenvironmentisnotonlyamatterforTORM,wemustalsoinvolveourclientsandpartnersintheprocess,ascombinedeffortswillleadtothebestresultsfortheenvironment.

oppoRTunITIes and RIsks

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Throughasystematicapproach,TORMaimstominimisetheimpactontheenvironment.TheCompany’senviron-mentalmanagementsystemisbasedontheISO14001standard,andTORMadherestotheGreenAwardandothersimilarprogrammestoensurethatenvironmentaleffortsmeetthelong-termexpectationsofallstakehold-ers.

Protectingcrew,theenvironment,cargoandvesselsisessentialtoTORM,andthemanagementsystemthere-foreintegratesthehandlingofsafety,qualityandenvi-ronmentalconcernsonallvesselsownedbyTORMandatallofficefacilities.

ShipsundertheDanishflagareincertainareassubjecttotightenvironmentalrulesaccordingtoDanishlegisla-tion.Infact,TORMappliestheserulestoallvesselsregardlessoftheflagtheyareflying.

Green awardTheGreenAwardisacertificatethatcanbeawardedtovesselsthatcomplywithhighersafety,environmentalandqualitystandardsthanrequiredininternationallawsandregulations,especiallyIMOrequire-ments.AvesselwithaGreenAwardpaysreducedportfeesorreceivesotherservicebenefitsinthoseportsthatareregisteredwiththeGreenAwardFoundation(www.greenaward.org).EightofTORM’sshipsareequippedwithaGreenAward.

ResponsIbIlITIesItistheresponsibilityofeveryemployeetocarefortheenvironment.However,ultimatelytheresponsibilityrestswithSeniorManagement,whohasdesignatedtheoper-ationalresponsibilitytotheSafety,QualityandEnvironmental(SQE)DepartmentundertheExecutiveVicePresidentofTORM’sTechnicalDivision.Apartfrommaintaininganddevelopingtheenvironmentalpolicyandmanagementsystem,thisdepartmentisresponsiblefortheauditingandonboardtrainingofseafarersinenvi-ronmentalawareness,reporting,proceduresandcom-pliancewithrulesandregulations.MonitoringofrulesandregulationsisdonebyTORMemployeesassistedbyupdatesfromshippingorganisationsandIMOnewslet-ters.TheSQEDepartmentintegratesnewrequirementsinthemanagementproceduresandoperationalinstruc-tions.

TRaInInGWithaglobalorganisationofmorethan3,000employeesofwhich90%arelocatedontheCompany’svessels,theapplicationofpoliciesandproceduresrequiressubstan-tiallocaltraining.Theenvironmentisnoexception.Therefore,traininginsafety,qualityandenvironmentalissuesiscarefyllyplannedandmonitoredbytheSQEDepartment.TrainingincludesannualseminarsforseaofficersandspeciallyassignedSQEteamstrainemploy-eesonallshipsinconnectionwithinternalaudits.Eachyear,aconcurrentEnvironmentalDayiscelebratedonthevesselstoraiseawarenessaroundselectedtopics.

In2009,theCompanywillemphasiseorganisationalanchoringofenvironmentalactivitiesthroughan‘atti-tudecampaign’.Thisinvolves:• Globaltrainingofofficeemployeesondepartmentmeetingsandviaspecialcourses.

• Trainingatofficerseminars.• TrainingsessionsforSQEteams.• SpecialtrainingbySQEteamsonboardfourvesselswiththeaimtocoverallshipsbytheendof2011asanSQEteamvisitsthem.

• Startingupenvironmentalteamsinallofficeswithmorethan20employees.

enVIRonMenTal ManaGeMenT

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InTeRnal audITAninternalauditplanensuresthatallactivitiesarecar-riedthroughinaccordancewiththeenvironmentalpoli-cy.Underthissystem,eachshipwillbevisitedapproxi-matelyonceayearandwheneverrequired.Thevesselauditsincludeanevaluationoftheship’senvironmentalpracticesandproceduresandinspectionofpertinentequipment,suchasoilywaterseparators,oilcontentmeters,bilgetanks,sewagetreatmentplant,garbagecompactors,garbagestorage,tanksandincinerators,interviewswithofficersandcrewmembers,inspectionofrecordbooksetc.AuditfindingsareincludedinthereportingtoSeniorManagement.

exTeRnal audITAsanISO14001certifiedcompany,TORMissubjecttoindependentauditsperformedbycertifiedexternalaudi-tors.AtTORM,Lloyd’sRegisterQualtyAssurance(LRQA)carriesouttheseaudits.Theyinvolvecontinuousmoni-toringofTORM’senvironmentalsystems,progressandperformance.TheheadquartersinCopenhagenarevisit-edonceyearlywhilelocalbranchofficesarevisitedonceeverythirdyearandallvesselsarevisitedonceinafive-yearperiod.

In2008,LRQAconductedexternalauditsintheCopenhagen,SingaporeandManilaofficesandoneightvesselswithatotalofsixobservations.Therewherenomajordeviations(non-conformities)fromtheISO14001requirements.

enVIRonMenTal daTaEnvironmentaldata,e.g.fuelconsumption,wasteamounts,chemicaluse,electricityandheating,iscol-lectedonaquarterlybasis,unlessspecialcircumstanc-esrequiremorefrequentupdating.AnumberofkeyperformanceindicatorshavebeensetandprogressisreportedtoSeniorManagementonaquarterlybasis.Forfurtherdetailsondatamanagement,pleaserefertotheaccountssectionintheendofthereport.

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Theenvironmentalimpactsfromshippingcanbesplitintothreephases:Construction,OperationandRecycling.

consTRucTIonThedesignofthevesselandchoiceofenginehavesig-nificanteffectonresourceconsumptionandenviron-mentalimpactduringoperationoftheship.Innovationinmachineryandhulldesignisconstantlyreducingtheenvironmentalfootprintoftheshippingindustry.Asacustomertotheshipyards,theshippingindustrycanthereforehaveaprofoundinfluenceonthevessel’slife-timeenvironmentalimpactthroughthetechnicalrequirementstotheshipyards.

accomplishments and TargetsTORMwishestomaintainamodernfleet,andtheCompanythereforecontinuallyrenewsthefleet,allowingittoimprovethedesignandtech-nicalinstallationsforthebenefitoftheenvironmentaswellasthebusi-ness.

AllTORM’stankersaredoublehulledandTORMwasamongthefirsttousethisnewgenerationofdouble-hullvessels.

TORM-ownedvesselsareconstructedatlarge,recognizedandinterna-tionally-orientedshipyardssuchasGuangzhouandDalianinChina.TORMhasappointedateamtosupervisethathighnewbuildingstand-ardsaremet.Avoidingerrorsanddefectsduringtheconstructionphasereducestheuseofresourcesandminimisestheriskofsubsequentacci-dents.

In2007,TORMsignedanagreementfordeliveryofsevenmainenginesforaseriesofproducttankersfromtheGuangzhoushipyardinChina.Theengines,ofmodel6S50ME-B,aresuppliedbyMANDieselandarethemostfueleconomicintheirengineclass.Theimprovedfueleconomyisexpectedtoleadtoa2.3%reductionofCO2emissionscomparedtopreviuosenginemodels.

In2008,TORMinitiatedatrainingprogrammeforkeytechnicalperson-nelattheshipyardswhereTORM’svesselsarebuilt.ThekeyobjectivesoftheprogrammearetofacilitatethatvesselsaretimelydeliveredtoTORMinagreedqualityandtoraisegeneralawarenessaroundsafety,qualityandenvironmentalissues.ThecourseinvolvesvisitsatotherTORMsupplierssuchastestingfacility,paintandengineproviders.

Thefirstgroupofpeopleattendedafive-dayseminarinDenmarkinNovember2008andin2009theprogrammecontinueswithfourgroupsreceivingintensivetraininginnewtechnologies,vesseloperation,envi-ronmentandsafety.

TORMregularlyassessthecooperationwithsuppliersandin2010theCompanywillimplementasubstantiveCSRsuppliermanagementpro-gram,coveringsuppliersofvessels,bunkerandconsumables.

enVIRonMenTal IMpacTs

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opeRaTIon

EMISSIONSTOAIRThemostsignificantenvironmentalaspectofshippingistheemissions,especiallycarbondioxide(CO2),nitrogenoxide(NOx)andsulphuroxide(SOx),fromtheconsump-tionoffossilfuelsforpropulsion,electricityandheating.Onaverage,76%ofvesselfuelconsumptionisusedonpropulsion.

Consumptionandemissionsdependonfactorssuchasspeed,draughtandtrim,propellerslip,theconditionofthehullandpropeller,optimisationoftheengineandthetypeandqualityofthefueloil.

Themainairemissionsfromshippingare:

• CO2(carbondioxide) TheemissionofCO2isafactoroftheamountofcon-sumedfuel.EmissionofCO2contributestoglobalwarming.IMOisworkingonmeasurestoreducetheindustry’sCO2emissionsandaimsatpresentinganactionplanattheClimateChangeConferenceinCopenhagenin2009.

• NOx(nitrogenoxide) NOxisproducedduringcombustionathightempera-turesinthemainengine.NOxisoneofthemainingredientsinsmog.IMOhassetlimitsonNOxemis-sionsdependingonthetypeofengine.

• SOx(sulphuroxide) TheemissionofSOxdependsontheamountofsul-phurinthefueloil.EmissionofSOxcausesacidrain,andthelowerrateofsulphurinthefuel,thebetter.IMOhassetalimitat4.5%onthesulphurcontentoffueloil.Incertainareas,theso-calledSulphurEmissionControlAreas(SECA),suchastheTheBalticSea,TheNorthSeaandtheBritishChannel,thesulphurcontentoffueloilusedonboardshipsmustnotexceed1.5%.

The4.5%capwillbereducedto3.5%fromJanuary2012,thenprogressivelyto0.50%by2020,whiletheSECAlimitwillbecutto1.0%fromJuly2010,andthenfurtherreducedto0.10%by2015.

accomplishments and TargetsIn2008,TORMcarriedoutanumberofactivitiesexpectedtofurtherimprovetheefficiencyofthevesselsandthusreduceemissionsofgreenhousegases,nitrogenoxidesandsulphuroxides.Themostimpor-tantactivitiesare:• InstalledWartsila7RT-flex58electronicmainenginesonthreeLR2tankers.TORMnowhaseightvesselswiththistypeofengine.Installed7RT-flex50electronicmainenginesontwoMRtankers.FourmoreMRtankerswiththenewmainenginesaretobedeliveredin2009.

• Continuedfittingoftorsionmetersonvessels.Torsionmetersmeas-uretheforceusedtorunthepropellersandtheinstallationmakesiteasiertooptimisetheefficiencyoftheengineandthusreducefuelconsumptionandemissions.Bytheendof2008,torsionmeterswereinstalledon16vessels.TheplanisforallofTORM’svesselstohavetorsionmetersfittedbytheendof2009.

• Electroniccylinderlubricationhasbeenfittedonafurther24vessels,nowinstalledon32vesselsintotal.Thisisexpectedtoreducecylin-deroilconsumptionbyupto25%andthussubstantialreducethereleaseofparticle-richmaterials.Thesystemwillgraduallybefittedonallvesselsastheydock.

• Atestingofnewfueladditivestoreducetheamountofsludgeforincinerationwasstoppedduring2008duetolimitedsucceswithreusingthesludgeasfuelandthusreducingfinalsludgeamounts.Followingfurtherresearchithasbeendecidedtoresumetheprojectin2009.

• Anonlinesystemforfuelanalysishasbeenselectedandin2009thesystemwillbetestedononevesseltoassesswhetherfuelconsump-tioncanbereducedthroughtightercontrolofcombustiontempera-ture.

• Anumberofsoftwaretoolstoselecttheoptimalvoyagespeedthroughanalysisoffuelprice,charterdemandandlaytimewereinstalledin2008.Theoptimisationofrouteplanningandvesselspeedtostrikethemostcostandenvironment-efficientbalancebetweentonnagesupplyanddemandisanon-goingprocess,andwillthuscontinuewithunabatedstrengthin2009.

• TORMdecidedin2008toinitiateaSkySailsprojectduring2009.SkySailsisaninternationallypatentedwindpropulsionsystembasedonlargetowingkites.AccordingtoSkySails,aship’saverageannualfuelcostscanbereducedby10%to35%byusingtheSkySails-system,dependingontheprevailingwindconditions.TheSkySails-systemconsistsofthreemaincomponents:Atowingkitewithrope,alaunchandrecoverysystem,andacontrolsystemforautomaticoperation.TheSkySailsprojecthasbeenputonholduntilfurthernoticeduetotheoverallfinancialcrisis.

From2008,TORMiscollectingenvironmentaldataonavoyagebasis.Thismeansthat,onrequest,customerswillreceiveaprecisestatementofe.g.theCO2emissionsallocatedtotheircargo,enablingcustomerstoestablishtheircarbonfootprint.

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CONSUMPTION OF FUEL OIL IN TON PER VESSEL MONTH, 2006-2008

600

700

800

900

1,100

1,000

1,200

500

LR2

LR1

MR

SR

Bulk

All Vessels average

2006 2007 2008

MIX OF FUEL OIL TYPES IN % PER VESSEL MONTH, 2006-2008

20

40

60

80

100

120

0

HS HFO LS HFO DO/MGO

2006 2007 2008

CONSUMPTION OF FUEL OIL IN TON PER VESSEL MONTH, 2006-2008

600

700

800

900

1,100

1,000

1,200

500

LR2

LR1

MR

SR

Bulk

All Vessels average

2006 2007 2008

MIX OF FUEL OIL TYPES IN % PER VESSEL MONTH, 2006-2008

20

40

60

80

100

120

0

HS HFO LS HFO DO/MGO

2006 2007 2008

In2008,oilconsumptionwasreducedby14%pervesselmonth.Whenadjustedforwaiting-timeinports,theesti-matedreductionwas3-5%comparedto2006.Technologicalimprovementscontributed,butamainfactorwastheslowerspeedappliedin2008comparedtoboth2006and2007.

Theoilconsumptionpervesselmonthalsochangeswiththefleet’smixofvesseltypes.Largervesselsusesignif-icantlymoreoilthansmallervessels,buttheyalsotransportmorecargo.Asanexample,anLR2tankerrequiresapproximately1.5timesthefuelofanMRtank-erbutcarriesmorethantwiceasmuchcargoandisthusmorefuel-efficient.

Themixofoiltypesischangingwithmoregeographicalareasrestrictingtheuseofheavyfueloiltoavoidacidrainandotherenvironmentaleffectsfromsulphuroxide(SOx).Thisdevelopmentisexpectedtocontinue.In2010/11forexample,theEmissionControlAreasinNorthAmericaandJapanwillbeexpandedtocover200Nmoffthecoast.

Theheavyfueloil(HFO)consumedbyTORMin2008hadanaveragesulphurcontentof2.95%(2.77%in2007)andthelowsulphurheavyfueloil(LSHFO)hadanaverageof1.17%sulphur(1.20%in2007).

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BOTTOMPAINTAcleanhullfreeofsea-lifesuchasalgaebloomsandmolluscreducesthefrictionandthusfuelconsumption.Tosecureacleanhull,shipsarecoatedwithanti-foulingbottompaint.AnIMOconventionbanningtheuseofharmfulorganotincompoundsinanti-foulingpaintsenteredintoforceinSeptember2008afterstudiesshowedthatcertaincompoundssuchasTBT(tributylin)persistinthewater,killingsealife,harmingtheenviron-mentandpossiblyenteringthefoodchain.

Silicone-basedbottompainthasshowntoreducewater-resistanceandthusimprovefuel-efficiency.Theeffectisgreatestonrelativelyhigh-speedvessels.Withsilicone–basedpaint,itisunnecessarytoapplyanyantifoulingbiocides.

accomplishments and Targets• TORM’sfleethasbeenTBTfreesince2004.• In2007,TORMstartedthetestingofsilicone-basedbottompaintontwovessels.Theprojectwasstoppedin2008afterthetestshowedonlylimitedeffectonTORM’sslowspeedvesseltypes.

• TORMwillcontinuouslymonitorbottompaintandanti-foulinginnova-tionsandconsiderchangingcurrenttechnologyifmoreenvironmen-tallyfriendlypossiblitiesarise.TheCompanyonlyappliesanti-foulingpaintsthatcomplywiththeIMOConventiononControlofHarmfulAnti-foulingSystemsonShips.

HANDLINGOFBALLASTWATERBallastwateriscarriedinunladenshipstoimprovesta-bilityandpropulsion.Itisseawatertakenonboardattheportbeforethevoyagebegins,andvariousmarineorganismscanbetakenonboardwithit.Whenthecargoisloadedattheship’sdestination,theballastwaterispumpedout.Whenthesemarineorganismsarepumpedoutinadifferentmarineecosystem,e.g.onadifferentcontinent,itmaybeharmfultobiodiversityandfisheries.

accomplishments and targetsThereisstrictinternationalcontrolofballastwatermanagement,andTORMisadheringtoandcloselymonitoringalllocalandinternationalregulationssuchasIMO’sballastwatermanagementguidelines.

In2008,TORMperformed256ballastwaterchangeswhilethatnumberwas114in2007.TheincreasecanbeascribedtoTORM’sdecisiontofol-lownewrecommendationsfromtheEuropeanCommissionstatingthatballastwaterchangesshouldbeperformedduringvoyagefromNorthAmericatoEurope.

WASTEHANDLINGOperatingvesselsproducevariouswastetypessuchaschemicals,garbageandwastewater.HandlingofwasteisregulatedunderMARPOLConventionAnnexVtopre-ventpollutionoftheseabydumpingofoperationalwastesamongothers.Wastemustbesortedinaccord-ancewithbothIMOregulationandlocallegislationinthehostingports.

accomplishments and TargetsAsthevesselcrewnotalwaysknowswheretodischargegarbage,TORMhasappliedstrictrequirementsonboardthevesselsforsorting,disposalandrecyclingofwaste.Wastehandlingonshipsisperformedaccordingtoalllegalrequirementsbutvariesfromshiptoship.Theprimaryrea-sonsforthisaretravelpatterns,differentlocalcollectionsystemsinportsandconsiderationsofcertainprotectedseaenvironments.

TheCompanyconstantlyworkstoensureoptimaldischargemethodfortheindividualfractionsandthatwasteisdisposedinasmanyfractionsaspracticallypossibletofacilitaterecycling.

TORM’swastehandlingsystemsaremoresophisticatedthanthesortingsystemsinmanyharbors,andtheCompanyworkstogetherwiththeU.S.CoastGuardtofacilitateimprovementsofwastereceptioninU.S.ports.

• In2008,sortingofspecialwastewasfurtherimproved.Now,compa-nypolicyprescribesthatbatteries,sensors,lighttubes,aluminium,cobberandothermetalsaswellasinkcartridgesaresortedinsepa-ratefractionsandareonlydischargedinportswithadequatehan-dlingsystems,suchasintheEuropeanUnion,U.S.,JapanandSingapore.

• Acomprehensivemappingofwastestreamsonalargenumberofvesselswasintroducedin2008tofurtheroptimisewastehandling.Dependingonthevessel’sexistingcolletionsystems,possiblenewequipmentincludesootcollection,bilge-processingandsewagetank.Themappingcontinuesin2009.

• In2009,theCompanywillintroducecolourcodingofgarbagetobesentashorethushelpportwastefacilitestosortthereceivedgar-bage.

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WasTe fRoM ToRM’s Vessels, 2007-2008

WasTe Type unit 2008 2007

Specialgarbage,recycled,ashore kg 9,500 1,000-pr.vesselmonth kg 13 2

Specialgarbage,hazardous,ashore kg 6,700 3,200-pr.vesselmonth kg 9 7

MARPOLwaste,ashore m3 3,000 1,900-pr.vesselmonth m3 4 4

MARPOLwaste,tosea m3 1,400 1,100-pr.vesselmonth m3 2 2

Wasteincineratedonboard m3 700 1,200-pr.vesselmonth m3 1 3

Waterdischargedfromengineroom m3 21,400 16,400-pr.vesselmonth m3 28 38

Sludgewaterfromengineroom,ashore m3 2,000 Includedbelow-pr.vesselmonth m3 3

Residuesfromtankcleanings,ashore m3 45,000 47,200-pr.vesselmonth m3 59 109

Waterfromtankcleanings,tosea m3 96,800 n.a.-pr.vesselmonth m3 128

19

USEOFCHEMICALSOperationofshipsrequiresuseofchemicalagentsforlubrication,maintenance,cleaningandpainting.Chemicalsrequirecarefulhandling,canleadtotoxicevaporationsanddisposalrequiresspecialsorting.

accomplishments and TargetsHandlingchemicalsisanintegratedpartofTORM’seffortstoensurehighlevelsofsafetyandenvironmentalprotection.Afocusedprojecttofurtherimprovedetailedregistrationoftypesandamountsofchemicalsubstancesonallshipshasbeenpostponedfrom2008to2009.Theaimoftheprojectistoreduceconsumption,ensurecorrecthandlingandlimitthenumberofsuppliers.

TANKCLEANINGSTankcleaningsareperformedatchangeofcargo,e.g.beforetransportingcleanpetroleumproductsontank-ersorwhenchangingdrycargofrome.g.coaltocornonbulkcarriers.Cleaningsrequireenergy,wateranddetergents.Waterfromcleaningsisdisposedtoseaaftersufficientsettlingtime.

In2008,TORMperformed376tankcleaningsor6.5inaveragepertankerand27cargoholdcleaningsonbulkcarriers,correspondingto4.7inaverage.Thecleaningoperationsrequiredatotalof102,019litresofdeter-gents,whichisanaverageof253litres.

accomplishments and TargetsTORMhashiredatankcleaningspecialisttooptimisetankcleaningoperationswiththeaimtoreduceconsumptionofdetergents,watercon-sumptionandensurethattankcleaningsareperformedexcactlywhen

necessary.AlldetergentsareIMOcompliant.

SAFETYANDPREVENTIONOFOILSPILLOilspillspotentiallyhavemajorimpactsonlocalmarineandshoreenvironments.Asoneoftheworld’sleadingcarriersofrefinedoilproducts,itisofoutmostconcerntoTORMtoavoidoilspills.Continuousmaintenanceofships,adequaterouteplanningtoavoidbadweatherandthoroughtrainingofstaffareessentialelementsincare-fulriskmanagement.

accomplishments and TargetsTORMiscommittedtomeetthemoststringentsafetyrequirements.Throughsystematicsafetyreviewsashoreandatsea,theCompanyassessesallaspectsofoperationsandthusminimiserisk.Thevessels’operatingproceduresareregularlyevaluatedandimprovedinordertoensurethatthevesselsareoperatedassafelyaspossible.

TORM’sownriskassessmentsandexperienceplayakeyroleinconnec-tionwithreviewsanddevelopmentoftheoperatinginstructions.Moreover,therearealargenumberofexternalpartieswhocontributetosettingoperatingstandards.InadditiontothestatutoryrequirementssetoutbyIMO,thevariousflagstates,TORM’scustomersandtheoilcom-paniesplayamajorroleinthattheyallmakespecificsafetydemands.

TORMconsiderstheoilcompaniesasitsbusinesspartnersandthere-foresharesallrelevantsafetyinformationwiththeminordertocontinu-ouslyexpandknowledgeandawarenessofsafetyintheindustry.

• TORMhasadopteda“ZeroOilSpillatSea”policy.• TORM’smanagementsystemincorporatesquality,safetyandenvi-ronmenttoensurethatallriskaspectsaredealtwithinanintegrat-edway.

• AllTORM’stankersareequippedwithdouble-hullcargotanks,andTORMwasamongthefirsttousedouble-hulltanks.

• TORMconductsregularlyemergencyresponseexercisesbothinenvironmentalresponseandemergencyresponse.

In2008,fouroilspillswhereregistered:• Anestimatedfivem3ofpalmoilwasspilledduringatankcleaningintheNorthSeaduetoamistakenlyopenmanifold.

• OnelitreofoilwasspilledtoseaattheDortyol(Turkey)terminaldur-ingacargodischargeoperation.

• Aleakageinamainenginelubeoiltubeonabulkcarriercausedthatapproximately1,000litresoflubricatingoiltrickledtoseaduringafewdays.

• Duringanoil-transferinAntwerpatankwasfilledwithoutbeingstoppedinduetime.Threelitresofmotorgasoilwentoverboardwhile3,500litreswasspilledontheaftdeck,butappropriatelycol-lectedtoatankonboard.

Anoilspillalwaysentailsaninvestigationreport,reviewofcurrentpro-ceduresandcorrectiveactionifnecessary.

20

RecyclInG of shIpsShiprecyclingcanbeaneconomicallyandenvironmen-tallysoundactivitythatcontributestosustainabledevel-opmentbyprovidingjobsforworkers,rawmaterialsforconstruction,andeconomicincentivestorecycle.Virtuallyeverypartofaship;thehull,machinery,equip-ment,fittingsandevenfurniturecannormallybereused.

Recyclingmassiveshipsthatweightensofthousandsoftonscancreatedangerousworkingconditionsandthreatstotheenvironment.Recyclingmustbedoneproperlytoavoidexposingworkersandthelocalmarineenvironmenttothehazardousmaterialssuchasasbes-tos,lead,residualfuelsandvariouschemicalsthatarecommonlyencounteredinshiprecycling.

IMOhasGuidelinesonShipRecycling,includingaGreenPassport,whichcanbeissuedtoeachship.

accomplishments and TargetsTheaveragelifeofaTORMvesselis25years.TORMoperatesinthetopsegmentofshipping,inwhichcustomersmakehighqualitydemands.TORMthereforetypicallysellsitsvesselsafter10-12yearsofoperation.Thismeansthatthevesselshaveanumberofyearsleftinoperationbeforebeingrecycled.

Attheendofavessel’slife,themajorityofitsweightwillberecycledforthebenefitoftheenvironment,butalltoooftenthehandlingofhazard-oussubstancesisinadequateintheplaceswherethevesselsarepre-paredforrecycling,butthishappenslongafterTORMhasleftcontrolofthevessel.

Consequently,TORMhasintroducedaschemedemandingthatallnew-buildingsmustbeprovidedwiththeGreenPassport,whichisadetailed,class-approvedlistofthevessel’shazardoussubstances.Thegreenpassportfollowsthevesselthroughoutitslifeandwillcontributetofacil-itatethatthevesselisrecycledinanenvironmentallyresponsibleandsafemanner.

Green passport TheGreenPassportforshipsisadocumentthatisaimedatfacilitatingtheapplicationoftheIMOGuidelinesonShipRecycling.Theguidelineshavebeendevelopedtogiveguidancetoallstakeholdersintheshiprecyclingprocess,andtheGreenPassportprovidesinformationaboutthematerialsknowntobepotentiallyhazardousutilisedintheconstruc-tionoftheship,itsequipmentandsystems.Thisdocumentshouldaccompanytheshipthroughoutitsoperatinglifetoensureadequaterecycling.SuccessiveownersoftheshipshouldmaintaintheaccuracyoftheGreenPassportandincorporateintoitallrelevantdesignandequip-mentchanges,withthefinalownerdeliveringthedocument,withtheship,totherecyclingfacility.

21

Environmentalawarenessonshoreisveryimportantbecausemanyofficeemployeeshavegreatsignificanceontheenvironmentalimpactonboard,forexamplerouteplanners,stafftrainersaswellasengineersandtechnicianswhoresearchininnovativetechnologies.

TORM’senvironmentalresponsibilityisnotlimitedtoonboardactivitiesthough.TheCompanyiscommittedtoreducetheenvironmentalfootprintfromofficefacilitiesaswell.Bytheendof2008,officesonlyemployed315ofTORM’sapproximately3,500employeesandtheenviron-mentalimpactsareevensmallercomparedtoonboard.Forexample,CO2emissionsfromofficesareonly0.05%oftotalCO2emissions.Theprimaryconcernsinofficesarepaperandenergyuse,whicharemonitoredtocon-tinuouslybringdownconsumption.Wastefromofficesissortedaccordingtolocallegislation.

ResOuRCe COnsumptiOn And wAste fROm tORm’s OffiCes, 2007-2008

WasTe Type unit 2008 2007

Plastics,recycled m3 16 3Paper,recycled m3 52 19Cardboard,recycled m3 6 5Electronicwaste,recycled m3 0.1 0.0Batteries kg 4 2 Electricityconsumption kWh 1,362,800 766,800Electricitypr.officeemployee kWh 4,330 4,330CO2emissionfromoffices tons 880 430CO2emissionpr.officeemployee tons 2,8 2,4

Waterconsumption(CPH/Singapore) m3 1,850 1,540

ResourceconsumptionandwastefromTORM’sofficesincreasedsubstantiallyinabsolutefiguresfrom2007to2008,whichismainlyafactorofthenumberofemploy-eesandofficesincludedinthefigures.2007onlyinclud-edtheofficesinCopenhagen,SingaporeandManilawithatotalof177employees.In2008,theofficesinCopenhagen,Mumbai,Singapore,ManilaandStamfordwithatotalof315employeeswereincluded,corre-spondingtoanabsoluteincreaseof78%.

onshoRe enVIRonMenT

22

TORMhasanISO14001environmentalcertification,whichemphasisestheCompany’senvironmentalcom-mitment.TORMalsosupportstheCarbonDisclosureProject(CDP)andtheCompany’sresponsecanbefoundonthewebsitehttp://www.cdproject.net/responding-companies.asp.

For2009,TORMwillreportaccordingtotheGreenhouseGasProtocol,whichmeansthattheCompanywilldis-closeemissionsofallsixgreenhousegasses(CO2,SF6,CH4,N2O,HFCs,PFCs),sulphuroxides(SOx)andnitro-genoxides(NOx)aswellasanoverallclimatestrategy.

RepoRTInG GuIdelInesThe2008greenhousegasemissionsreportingcoversscope1andscope2oftheGreenhouseGasProtocolexceptfortheactivitieslistedbelow,aswellasselectedscope3activities.TORMwillcontinuetoalignreportingstructureandcontenttotherequirementsoftheCarbonDisclosureProject.

ApartfromCO2emissions,emissionsofSOxandNOxarereported,andthefollowingmethodologiesareapplied:

Scope1• ConsumptionofbunkeroilhasbeencalculatedtogreenhousegasemissionsbyusingtheDanishMinistryofTransport’sresearchinemissionsrelatedtotransportation(TEMA2000).Emissionsarecalcu-latedforeachsinglevesselandconsolidated.

• Emissionsfromcompanycarsarebasedonnumberofcars,whereallcarsateachofficearemadeequalindistanceandconsumption.(Copenhagen20,000km,Singapore7,200kmandManila7,326km,dis-tancesareestimatedbasedonanaverageexpectedusagepercountry,efficiencyissetto12km/liter.)

• Numbersunderscopeonedatasheethavebeencol-lectedonboardthevesselsorattheoffices.Thecol-lectionisbasedonactualusageordisposalsasdescribedin“AbouttheReport”.

Scope2• EmissionsfromelectricityconsumptioninofficesarecalculatedbyusingGHGemissionsfactorsversion3.02006.

• Emissionsfromheating(districtheating)inCopenhagenofficesarecalculatedbyusingDanishemissionsfactors(www.key2green.dk).

Scope3• Emissionsfromplanetravelarecalculatedbyfactor-ingactualtravelmileagewithLufthansaemissiondata(TechnicalcrewinCopenhagen,Singapore,ManilaandStamford).

• Emissionsfromplanetravelarecalculatedbyfactor-ingestimatedtravelmileagewithLufthansaemissiondatafor(Non-technicalcrewinCopenhagenandMumbai–estimatesarebasedonnumberofemploy-eesandcosts).

• Emissionsinthe2007reportdidnotincludecertaindatawhichwerenotdiscovereduntil2009.Therefore,the2007emissionshavebeenupdatedaccordingly.

2008greenhousegasemissionsarecalculatedforves-selsintechnicalmanagementinTORM,amountingtoatotalof759vesselmonthsofoperation.Thenumberofvesselmonthsisbasedon:• 65vesselsundermanagementby1January2008.Duringtheyear,fourwassold,whilesixnew-build-ingsandonesecond-handvesselwereacquired.

• EightvesselsownedbyTORMarenotincludedintheaccounts.TwoofthemareinBareBoatCharterandsixvesselsareintechnicalmanagementbyL.G.R.deNavigazioneinNaples,Italy.

eMIssIon accounTs

23

enVIRonMenTal daTa emissions

daTasheeT unit 2008 2007

Revenue mUSD 1,184 774Shipmonths no. 759 547 scope 1 related data (shipping and company cars) Fuelconsumption(HeavyFuelOil) 1000tons 486 406Fuelconsumption(LowSulphurHeavyFuelOil) 1000tons 91 59EngineOil 1000tons 16 13LubricationOil 1000tons 5 3Incineratedsludge M3 5,685 3,694Engineslopdisposedashore M3 1,970 -Enginewastewaterdisposedatsea M3 21,377 16,391Waterfromtankcleaningsdisposedatsea M3 96,837 -Slopfromtankcleaningsdisposedashore M3 45,025 47,242Ballastwaterexchangesatsea No. 256 114Totaldistancetravelled 1000Nm 4,279 -Tonkm(Cargotimesdistance) 1,000,000tonkm 233,766 194,374Averagespeed Knot 13.7 -ConsumptionofmainengineprNm Kg 105 -ConsumptionofalloilonboardprNm Kg 139 - Companycartravel–estimated 1000km 672 750 scope 2 (office electricity and heating) Electricityconsumptioninoffices mWh 1,363 767Districtheating GJ 1,616 1,226 scope 3 (employee airplane travel) Airplanetravelbyemployees 1000km 104,848 41,157 eMIssIons scope 1 (shipping) CO2 1000tons 1,876 1,504SOx 1000tons 33 24NOx 1000tons 43 44 scope 1 (company cars) CO2 tons 129 144SOx Kg 1 1NoNOxoncarsacc.ToKey2Green.dk scope 2 (office electricity and heating) CO2 tons 747 443SOx kg 317 190NOx kg 1,077 640 scope 3 (employee airplane travel) CO2 1000tons 11 5SOx kg 91 36NOx tons 52 21 RaTIos TotalCO2emission 1000tons 1,889 1,508CO2emissionperUSDrevenue kg 1.60 1.95CO2emissionpervesselmonth tons 2,472 2,755CO2emissionpertonkm g/tonkm 8,0 -VesseltransportCO2contributionoftotal % 99.35 99.66PlanetravelCO2contributionoftotal % 0.60 0.30OfficeCO2contributionoftotal % 0.05 0.04

24

Inadditiontofinancialreporting,TORMwishestogiveitsstakeholdersadeeperinsightintotheCompany’sactivitiesandthusabroaderfoundationforthestakeholders’approachtoandcooperationwiththeCompany.BythisreportTORMopenlyaccountsforitsimpactontheenviron-mentandthemeasurestakentoreducetheharmfuleffectsontheenvironmentfromshippingactivities.

Thissectiondescribesthemethodologiesintheenviron-mentalreporting.Keydefinitionsarebasedonexistingpro-grammesandactivities.Dataarestatedfortheyears2008and2007.

REPORTSCOPEThereportingyearisthefinancialyear1January-31December2008.

EnvironmentaldataisbasedonallvesselstechnicallyoperatedbyTORMamountingtoatotalof759vesselmonthsofoperation.Thenumberofvesselmonthsisbasedon:• 65vesselsundermanagementby1January2008.Duringtheyear,fourwassold,whilesixnew-build-ingsandonesecond-handvesselwereacquired.

• EightvesselsownedbyTORMarenotincludedintheaccounts.TwoofthemareinBareBoatCharterandsixvesselsareintechnicalmanagementbyL.G.R.deNavigazioneinNaples,Italy.

ThisreportincludesemissionsfromTORM’sofficesinCopenhagen,Mumbai,Singapore,ManilaandStamford(covering315employees).DataforofficesinTokyo(oneemployee)isnotincludedinthereport.

EmissionsfromairtravelareincludedforofficestaffbasedinCopenhagen,Singapore,ManilaandStamfordandairtravelrelatedtoshiftofDanishandPhilippineoffshorecrewmembers.AirtravelemissionsfromCroatianandIndiancrewshavebeenestimatedbasedonnumberofemployeescomparedtoDanishand/orPhilippinecrews.

Keydataarecalculatedasstatedbelow.Definitionsandmethodologiesaresimilartothepreviousyearunlessstat-ed.AlthoughitisofgreatimportancetoTORMthatalldatainthisreportareascompleteandpreciseaspossible,theremaybeanelementofuncertaintytosomedata.

AlldataarecollectedandprocessedbyTORM’sSafety,QualityandEnvironmentalDepartment.Datafromvesselsarecollectedaccordingtoaspecificreportingrouting,mainlyonamonthlybasisbutforcertaindatawithalowerfrequency.Otherenvironmentaldataarecollectedonanannualbasis.

CONSUMPTIONANDEMISSIONSFROMVESSELSSeeemissionsaccountpage22.

WASTEHANDLINGOperationalwasteismeasuredinm3andisregulatedundertheMARPOL73/78ConventionAnnexV.Measuringwasteinm3iscomplexaswastecompactingcanreducethevolumesignificantlywithoutreducingthequantity.Datainthisaccountarebasedonmonthlyestimatesandaresubjecttoaconsiderableriskoferror.

OPERATIONALASPECTSDataforthecleaningoftanks,handlingandexchangeofballastwaterandanchoringoperationsarecontinuouslyregistered.Useofchemicalsiscalculatedonthebasisofthequantity.

AIRPLANETRAVELSeeemissionsaccountpage22.

OFFICESEnvironmentaldatafromofficesarecollectedbytheuseofquestionnairesandmeterreadingsordatafromsuppliers;somedata’sarecalculated/estimatedbasissquaremetercomparsiontoawholeofficebuilding.

Companycars–seeemissionsaccountpage22.

Datainthisreporthavebeenenhancedcomparedtothe2007report.Comparisonbetweenthereportfrom2007and2008cangiveawrongpicture,wherefore,thenumbersinthisreportcovering2007shouldbeusedinstead.

abouT The RepoRT

25

name of Vessel Months active in 2008 name of Vessel Months active in 2008

BelTaylor 12months TORMMARGRETHE 12monthsGotlandAliya 5.8months TORMMARIANNE 7monthsGotlandCarolina 12months TORMMARIE 12monthsGotlandSofia 12months TORMMARINA 12monthsNordicLisbeth 10months TORMMARLENE 3.0monthsTORMAMAZON 12months TORMMARTA 12monthsTORMANHOLT 12months TORMMARY 12monthsTORMANNA 12months TORMMATHILDE 1.9monthTORMANNE 12months TORMMETTE 12monthsTORMANN-MARIE 12months TORMMOSELLE 12monthsTORMBALTIC 12months TORMNECHES 12monthsTORMBORNHOLM 6.0months TORMOHIO 12monthsTORMCHARENTE 12months TORMOTTAWA 12monthsTORMESTRID 12months TORMPLATTE 12monthsTORMFOx 12months TORMRAGNHILD 12monthsTORMFREYA 12months TORMREPUBLICAN 12monthsTORMGARONNE 12months TORMRHONE 12monthsTORMGERD 12months TORMROSETTA 12monthsTORMGERTRUD 12months TORMROTNA 12monthsTORMGOTLAND 9.7months TORMSANJACINTO 12monthsTORMGUDRUN 12months TORMSAONE 12monthsTORMGUNHILD 12months TORMSARA 12monthsTORMHELENE 12months TORMSIGNE 12monthsTORMHELVIG 12months TORMSOFIA 12monthsTORMHORIZON 12months TORMTAMAR 12monthsTORMINGEBORG 12months TORMTEVERE 12monthsTORMISMINI 12months TORMTHAMES 12monthsTORMKANSAS 12months TORMTHYRA 12monthsTORMKRISTINA 12months TORMTINA 12monthsTORMLAURA 7.7months TORMTRINITY 12monthsTORMLENE 1.8month TORMVALBORG 12monthsTORMLOIRE 12months TORMVENTURE 12monthsTORMMadison 12months TORMVITA 12monthsTORMMaren 4.4months TORMWABASH 5.9monthsTORMMargit 12months

MembersofthecrewonTORM’svesselsincludearound101Croatians,342Danes,1,183Philippinesand1,513Indians.

Vessels undeR ManaGeMenT

26

To The senIoR ManaGeMenT of ToRM a/s

WehaveperformedareviewoftheTORMEnvironmentalReport2008(“theReport”).ThepurposeofourreviewwastosubmitastatementontheenvironmentaldataintheReport.Themanagementofthecompanyisrespon-siblefortheReport.OurresponsibilityistoprovideaconclusionbasedonourreviewoftheReport.

The peRfoRMed ReVIeWWehaveperformedourreviewinaccordancewiththeDanishauditingstandardonassuranceengagementsRS3000(“Assuranceengagementsotherthanauditsorreviewsofhistoricalfinancialinformation”).IthasbeenourpurposetoobtainlimitedassurancethattheenvironmentaldataatGrouplevelintheReportareinaccordancewiththedescribedreportingpracticeandinformationreportedbyvesselsandoffices.Inaddition,wehaveanalysedonasamplebasistheenvironmentaldatareportedbyvesselsandoffices.

Ourreviewisbasedonanevaluationofriskofmaterialerrors.Wehaveevaluatedthereportingpracticeandanalysedcorrelationswiththecompany’sauditedannualaccounts,andwehaveperformedspotcheckcompari-sonswithdocumentation.Thereviewislimitedtofirstofallincludeinquiriesfrommanagementandemployeesaswellasanalyticalproceduresandalimitedlevelofassur-anceisthuslowerthantheassurancewhichwouldhavebeenobtainedifwehadperformedanaudit.

conclusIonDuringourreview,nothingcametoourattentionthatcausedusnottobelievethattheenvironmentaldatafortheGroupoverallareinaccordancewiththedescribedreportingpracticeandinformationreportedbyvesselsandoffices,andenvironmentaldatafromvesselsandof-fices,havebeendocumented,collectedandcalculatedinaccordancewithGroupinstructions.

Copenhagen,27May2009

deloITTeStatsautoriseretRevisionsaktieselskab

PrebenJ.Sørensen,State-authorisedPublicAccountant

audIToR’s RepoRT

27

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