Lubricants sustainability and competitiveness for AVPN deal share platform

1. Lubricants Sustainability &
Competitiveness for the Next Decade –
Singapore & Its Role in Asia
AVPN Deal Share Platform (DSP) Application

2. Executive Summary
2
The Asian Lubricants Industry Association’s (ALIA’s) active involvement in its members’ welfare is critical to overcome market & sustainability challenges for the
next decade. The Association aims to provide programs and initiatives to ensure that our members will have the tools and processes necessary to:
1. Collaborate for operating efficiency improvements at our manufacturing plants;
2. Reduce product write-offs, manufacturing wastes and greenhouse gas (GHG) emissions; and,
3. Leverage technology for our lubricants and greases to achieve the same GHG emission reduction
AVPN’s Deal Share Platform funding will enable the Association to:
• Lead the industry to embrace sustainability targets in their growth plans, with the hope that this will lead to net-zero emissions in their respective plants;
• Target US$ 6 Million P&L gain & US$ 2 Million working capital reduction for ALIA members with supply chain optimization modelling, C-product online
marketplace and slop management initiatives; and
ALIA sees AVPN’s Deal Share Platform as the catalyst to enable the industry’s resiliency in a fast emerging “green economy” and establish Singapore as a
sustainable lubricants hub for the region.

3. Background
3
 More industry-wide value creation initiatives to compensate value
destruction situations
 More collaborative efforts for full end-to-end supply chain solutions
o Optimum total system cost
o Reduce inventory and waste generation
o Leverage Singapore’s advantaged infrastructure (logistics,
education, tax-optimized supply chain)
 Product & manufacturing technology solutions
 Green solutions
Lacking industry-wide solutions to address cost competitiveness and sustainability
Demand
Ecosystem
2019 Asian Finished
Lubes & Greases Demand
= 18 Million Metric Tons (MT)
Source: Dr Sanjay C Kuttan, 14052021
Value
Proposition

4. Asian Lubricants Ecosystem – Sustainability Framework
4
Source: Dr Sanjay C Kuttan, 14052021
Robust analysis is required to make key lubricant supply decisions as the economy transitions to a low carbon future.
Singapore remains a key node to supply lubricants to
the local and regional markets
Impact assessment of
changing landscape
• Electrification
• Electric Vehicles
• Plug-In Hybrid
• Next generation fuels
• Biofuels (Gen 2 and
above)
• H2 fuel cell
• Green Base Oils
• Manufacturing automation
Technology
Policy - Government &
Consumers
• Green procurement
• Carbon accounting
• Environmental impact
• Circular economy
• Carbon tax
• Import of finished products
− Supply to local market and serve as a transhipment hub
for regional markets
− Supply only to local market with the regional markets by-
passing Singapore as a transhipment hub
• Import of green baseoil and additives
− Products to be locally blended for local market and
regional markets
− Local blending can either be via
o Conversion of existing plants to produce “green
products”
o JV to set up a new “Green” blending plant with supply
of green products
• Local production of green baseoil, additives and products
− Products to be locally blended for local market and
regional markets
− Local blending can either be via
o Conversion of existing plants to produce “green
products”
o JV to set up a new “Green” blending plant with supply
of green products
Products
• Cost of products
• Product slate
• Time taken for OEM approvals with
new green slate
Manufacturing
• Utilisation rate of new facilities re
sales volumes of new product
• Mix production of green and non-
green products
Sales & Marketing
• Supplying existing market needs
for current non-product slate
• Transitioning time customers to
new products
Ecosystem
• Domestic green policy adoption
timelines
• Impact to Lubricants ecosystem
Key considerations for
various pathways
Background (Con’t.)

5. Product Product (#) 2019 Demand (Million Tons)
Classification
400 100% 18.0 100%
A 80 20% 14.4 80%
B 107 27% 2.2 12%
C 213 53% 1.4 8%
Project Objectives
5
Short term: no capital involved
1. Implement industry-wide collaborative programs
a. Supply chain modeling template
b. C-Product online marketplace
c. Slop management
2. AP Lubricants Ecosystem Study
3. AP Lubricants Sustainability Roadmap
4. Knowledge development & sharing activities
Cost competitiveness, sustainability & Singapore’s role are focus areas; programs with or without capital investment being proposed
Million
MT
No of
Products

6. Project Details
6
Program Description Methodology Year 1 Year 2 Year 3
Asian Lubricants
Ecosystem Study
• Set baseline to document value proposition economic impact Full industry analysis
Asian Lubricants
Sustainability Roadmap
• Life Cycle Analysis (LCA)
• Industry-applicable carbon neutral solutions
• Members’ strategies & timelines
Full industry roadmap
Supply chain modeling • Cost-optimized supply chain solutions for members, esp. SMEs
• Course work for tertiary, masteral level students
• Optimization software on cloud
• Partner with Singapore universities
C-Product / slop online
marketplace
• Flag slow-moving / slop inventory
• Manage buy-&-sell transactions
• Buy-&-sell platform on cloud
• Partner with Singapore universities
• Cloud
• Research
Slop management • Oil recovery technology (e.g., re-refining)
• Include in Singapore lube centre design
Knowledge development
& sharing
• Focused studies, seminars/webinars, training courses, Enhance current programs
Legend:
Idea / concept development
Design / process development, construction
Actual implementation
Aggressive 3-year program to drive initiatives and keep momentum going

7. Investment/Cost Summary
7
Funding Request (US$K)
Programs Total Year 1 Year 2 Year 3
1,500 700 400 400
Program Executive (full-time) 6/mo 216 72 72 72
Asian Lubricants Ecosystem Study One-time 200 200
Asian Lubricants Sustainability Roadmap One-time; 5/mo 320 200 60 60
Cloud-based supply chain modeling One-time; 10/mo 340 100 120 120
C-Product online marketplace; slop management One-time; 10/mo 340 100 120 120
Knowledge
development & sharing
Focused studies,
seminars/webinars
28/yr 84 28 28 28
1. Solarisation
2. EnergyEfficiency
3. Waste Heat recovery systems
4. Blendingplant conversion/ modification
5. Sustainablelubricants –baseoils andadditives
6. Operational mgmt of changeforsustainable lubesmfg
7. Sustainablelubesmarket opportunities andchallenges
8. CircularEconomy andnew business options
9. Carbonaccountingandcredits
10. Greenprocurement
11. Safety andmanagement of change
12. Greenpolicy instruments inSingapore andthe region
13. Annualindustry pulse
1. Regional Policy shifts
2. Market i.e., Customer/Industry shifts
3. New lubricant performance envelopes
4. Alternative fuel and technology trends
Funding breakdown to ensure program focus & continuity; projected investment enabled by funding but not included in funding request

8. Project Outcome and Impact
8
Programs Tangible Benefits
Projected “+” Impact (US$M)
Total 2022-2024 2025-2030 Intangible Benefits
Profit
& Loss
Working
Capital
Profit &
Loss
Working
Capital
Profit &
Loss
Working
Capital
$6.0 $2.0 $4.0 $1.3 $2.0 $0.7
Asian Lubricants
Ecosystem Study /
Sustainability
Roadmap
Full understanding of total system cost
Full understanding GHG emissions,
mitigating actions and tracking
New insights and improvement opportunities,
sustainability roadmap, responsible corporate
citizen
Supply chain
modeling
Total system cost reduction with optimum
supply chain decisions
$3.0 $1.0 $1.0 $0.3 $2.0 $0.7 New industry services
C-Product online
marketplace / Slop
management
Lower working capital (reduced inventory),
lower cost (lower COGS, less write-downs
& write-offs), waste reduction
$3.0 $1.0 $3.0 $1.0 New industry services
Knowledge
developmentt &
sharing
Continued education, best practice sharing
FOREX S$1.33/US$
LEAD Programme will support ALIA’s efforts to bring the whole Asian lubricants industry to the next level in terms of efficiencies and sustainability

9. Management and Development Team
9
Position Name Nationality ALIA Background Relevant Work Experience
Chairman & President,
ALIA
Tan Pai Kok Singaporean Existing 39 Years in Oil and Gas, primarily in Lubes with Esso & Total;
more than 15 years in various senior positions covering Sales and
Marketing, Supply Chain and Operations
Work assigned to Taiwan (5 years) and Malaysia ( 3 years). Supervising
the construction of Tuas plant in Singapore, the largest lubes plant in
the world for Total Energies
Executive Director, ALIA Wong Ming
Ghee Bernard
Singaporean Existing 38 years in petroleum and chemicals industry with The Lubrizol
Corporation, BP and Mobil. Focused on Asia Pacific, with 19 years
based in China till 2018. From 2019, with Hafnium Hafaway PE
Investment company, and Vistage Singapore CEO coaching.
Joined ALIA in December 2020
8 years general management with BP-Castrol China, and BP-Sinopec
Zhejiang Petroleum Co; followed by 10 years Asia Pacific leadership
with The Lubrizol Corporation.
CEO Coach to SME founders and CEOs. Advisor/operating director
with Hafnium Hafaway PE Investment company.
Director, ALIA Puckett Anthony
Steven
Singapore PR
/ British
Existing 45 years in energy business, 30+ years in Asia. 25 years with a
major oil company in senior exec roles. Owner of Singapore-
based energy advisory for 20 years, focused on strategy and
business growth serving IOC, NOC & Institutional clients
Lube Refinery Manager 1980s. Planning manager for $5 Billion Japan
fuels and lubes business. Formulated $1 Billion China lubes entry in
1990’s. Author of multiple papers on Asia lubes business
Director, ALIA Denton Vicky
Villena
Filipino Existing 30+ years experience covering the oil and gas industry in N.
America, Middle East and Asia
Master in Journalism, University of California, Berkeley, U.S.A.
Assistant Editor, The Oil Daily Newspaper, Washington, D.C.; Editor-in-
Chief, American Chamber of Commerce in Egypt, Cairo; Editor-in-
Chief, F&L Asia Limited, HK
Council Member,
Sustainable Energy
Association of Singapore
(SEAS)
Kuttan Sanjay
Chittarajan
Singaporean Member-
ship via
SEAS
ExxonMobil (12 yrs); McKinsey & Company (5 yrs);
Energy Market Authority (2 yrs); DNV (5 yrs);
Energy Research Institute (2 yrs)
Singapore Maritime Institute (2018-current)
Lubricant field technical service, formulations, business development,
regional sales and marketing strategy & refining for baseoil production
(ExxonMobil 12 yrs); Lubricant Strategy for oil majors (Mck&Co - 2 yrs),
Sustainability (12 yrs since 2009 with EMA)
Industry Liaison Advisor Champion
Charles
Singaporean Existing Over 40 years in the lubricant additives industry with 37 years
(1980–2016) of operational experience with Infineum. 4 years
(2017+) as an independent consultant to global clients interested
in entering the lube and lube additives industry in Asia.
Developed & implemented the strategy to set-up Infineum’s first ever
entity in India (2013-2016). Responsible for growing all of Infineum’s
lubricant additive core segments for customers in South Asia, South
East Asia and Australia.
Consultant Henares Manuel
Augusto Jr J
Singapore PR
/ Filipino
New 27 years with ExxonMobil (1994-2021), of which 24 years were
spent in lube Project Management / Operations / Sales
leadership roles
Project Development Manager for the Jurong Grease & Jurong
Synthetics Plant, commissioned in 2016 & 2017, respectively.
Consultant To be determined New For Asian Lubricants Ecosystem Study / Sustainability Roadmap
Program Executive To be determined New

10. Back-Up

11. Crude to
refinery
Refinery to
base oil
Base oil dely
to additive
plant
Base oil &
additive dely
to lube plant
Lube plant
blend & fill
Dely to
customer
In-use (OEM,
customer)
After use
(end-of-life)
Asian Lubricants Sustainability
11
Life Cycle Analysis (LCA) is a way of measuring before deciding on your 80/20 & subsequent strategy
Cradle-to-Grave/Cradle-to-Cradle (Circular)
Source: Kline analysis based on GHG protocols
Scope 1 covers direct
emissions from owned or
controlled sources
Scope 2 covers indirect
emissions from the
generation of purchased
electricity, steam, heating and
cooling consumed by the
reporting company.
Scope 3 includes all other
indirect emissions that occur
in a company's value chain
Gate-to-Gate
Cradle-to-Gate
Source: ISO 2011
Greenhouse gases (GHGs) are emitted
and removed throughout the life cycle of
a product (cradle-to-grave) from raw
material acquisition through production,
use and end-of-life treatment.
Using life cycle analysis with climate
change as the single impact category
may offer benefits through influencing:
• Methods to be adopted
• Performance tracking
• Efficient and consistent procedures
• GHG reduction identification leading
to development and implementation
of GHG management strategies
• Consumer behavior
• Correct and comparable
communication of Carbon Footprint
of Products (CFP) in a free and open
market
Emissions Calculation Methods

12. Sustainability Standards: ISO 14067
12
ISO 14067 is the International Standard that details principles,
requirements and guidelines for the quantification and
communication of the carbon footprint of products (CFPs)
(including both goods and services), based on GHG emissions and
removals over the life cycle of a product.
• CFP study report provides an accurate, relevant and fair
representation of the CFP
• Based on the ISO 14020 series, ISO 14040 series and ISO 14064-
1
• Beneficial to interested parties with clear & consistent
quantification, communication and verification of CFPs
An organization may wish to publicly communicate a CFP for many
reasons which may include:
• providing information to consumers and others for decision-
making purposes;
• enhancing climate change awareness and consumer engagement
on environmental issues;
• supporting an organization’s commitment to tackling climate
change;
• supporting implementation of policies on climate change
management.
Source: ISO 2011

13. Sustainability Standards: PAS 2050, GHG Protocol, PAS 2060
13
PAS 2050 was introduced in 2008 (revised in 2011) with
the aim of providing a consistent internationally applicable
method for quantifying product carbon footprints.
The GHG Protocol Product Standard was released in 2011
and in addition to providing requirements to quantify the
GHG inventories of products, also includes requirements
for public reporting. Both standards are broadly consistent
in their quantification methods, but their differing purpose
and standard development processes has lead to two
different documents.
The PAS 2060 standard was published by the British Standards Institution in 2010 and enables organisations to demonstrate that their
carbon neutrality claims are credible and verified in order to increase customer confidence. The main benefits of the standard are:
• Only internationally recognised certification for organisational carbon neutrality.
• Guides companies to quantify their carbon footprint and supports subsequent reduction of emissions with a 12-month review.
• The inclusion of offsetting using certified credits encourages the support of climate finance projects that add social and
environmental value.
• It enables companies to demonstrate a voluntary and ambitious commitment to climate action
Source: PAS 2060 factsheet
Source: GHG Protocol PAS 2050 factsheet