SHV ENERGY 2014 SUSTAINABILITY REVIEW

SHV ENERGY 2014 SUSTAINABILITY REVIEW

02 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 03 OUR COMPANY OUR ENERGY As part of SHV Holdings N.V., SHV Energy belongs to a family owned Dutch organisation that has supplied energy to businesses and consumers for over 100 years. Well-known brand names include Primagaz, Calor Gas, Liquigas, Gaspol and Ipragaz. SHV Energy operates in more than 20 countries. Globally, SHV Energy employs 15,000 people, has a turnover of over 6 billion and provides decentralised energy sources LPG, LNG and biomass to tens of millions of customers. SHV Energy is the largest dedicated global LPG distributor. As a lower carbon, low polluting fossil fuel, LPG can make a substantial contribution towards improved indoor and outdoor air quality and reduced greenhouse gas emissions. LPG is widely available and is becoming more so due to the increase in natural gas fields around the world. LPG can be used for hundreds of commercial and domestic applications. SHV Energy is proud to lead the way in developing existing and new markets for LPG around the world through effective innovation, education and promotion strategies. We believe that lower-carbon gaseous fuels like LPG and LNG still have a considerable role to play, both now and in the foreseeable future. People and businesses can reduce pollution today by switching from high-polluting, carbonintensive fuels such as oil to these forms of energy. They are clean, available now and do not need major financial support of governments. Sustainability is key in our strategy. We believe we can contribute to a cleaner planet, by working together with our stakeholders thereby building a better performing business. Better Cleaner Together will guide us in reaching our ambition to become a leading, global and sustainable brand for the off grid energy market. Over 30 million customers in Latin America, Asia and Europe use our energy for hundreds of applications, including cooking, heating and powering low-polluting vehicles. SHV Energy is proud to have market-leading LPG companies on these three continents. Throughout our history, the demands of customers and society have always defined our energy approach, rather than any one specific fuel. We are therefore also active in the area of other decentralised renewable energy sources like biomass and solar technology. SHV Energy experts help clients reduce their energy consumption and find unique energy combinations, going far beyond their remit of simply supplying energy. Whatever energy solution our customers choose, they can rely on our commitment to excellence in client service and safety. Our energy solutions include a range of fuels ranging from LPG to LNG as well as bio-based fuels and solar power.

04 I SHV ENERGY 2014 SUSTAINABILITY REVIEW LPG in Numbers LPG LPG s volume is Power of gas, convenience of liquid. LPG is a natural by-product from the extraction of natural gas and oil, and from refining crude oil. At room temperature, LPG is gaseous, but it becomes liquid when cooled or pressurised. In liquid form, the gas can be easily ed and stored on-site in tanks of varies sizes, including small cylinders. times SMALLER when in a liquid state. LPG is particularly suitable fuel for rural areas that are not connected to the mains gas grid. In these areas it may provide people and businesses with a low-carbon and economic alternative to coal, heating oil, diesel or electricity from the grid. Similar to natural gas from the mains gas grid, LPG is a flexible source of energy and has a wide variety of uses including space and water heating, cooking and power. It is also increasingly applied in. In combination with energy efficient conversion technologies such as condensing boilers and micro-chp systems, further carbon and energy savings can be established. An LPG stove can be times more efficient than a charcoal stove commonly found in urban households in many parts of the world. charlus Why LPG? Portable LPG can be ed and used almost anywhere. This means regions without a mains gas network, can have access to a clean and convenient fuel and it can be used in even the most remote areas. Clean LPG can bring the same environmental benefits as natural gas: when used for heating, LPG s life-cycle CO 2 emissions (73g/MJ) are 30% lower than heating oil (95g) and 115% lower than coal (158g). It also considerably reduces air pollution, as it produces significantly less Nitrogen Oxides (NO x ) and particulate matters (PM 2.5 and 10 ) than oil and coal. All of these benefits can be realized without undertaking the significant investment required to extend the existing natural gas grid network. Efficient LPG is cost-effective, since a high proportion of its energy content is converted into heat. LPG can be up to five times more efficient than traditional fuels, resulting in less energy wastage and better use of our planet s resources. Convenient There are more than a thousand applications ranging from cooking to heating,, agricultural uses, industrial applications and even bird scarers. In Brazil, LPG is the energy of choice for LPG is a naturally occurring by-product of natural gas extraction of Brazilian homes; 33 million cylinders are delivered per month, door to door. and crude oil refining (40%) therefore we either use it or it is wasted.

06 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 07 LNG BIO-BASED FUELS A growing part of our energy portfolio is composed of bio-based fuels. Balcas is a leading biomass supplier. In addition, we have recently signed a long term agreement with Neste Oil to develop BioPropane. Biomass Biomass is a non-fossil solid fuel, usually natural or processed wood, used in individual heaters or central heating boilers. Good-quality biomass from sustainable local sources has a role to play in the future rural energy mix. Solid biomass is suitable for use in remote areas that are not connected to the gas grid, where it can be deployed as a lower cost alternative to oil. Biomass is particularly attractive in rural areas where the biomass is readily available. One of our companies, Balcas is a leading timber products supplier, and has pioneered biomass renewable energy in the British Isles. The business has grown organically, and through acquisition and investment in the latest processing technologies. Balcas has led the development of the market for wood pellet fuel in Ireland and Britain. Liquefied Natural Gas (LNG) is natural gas in a liquid form. After natural gas is extracted from the ground, the temperature is lowered and the natural gas is compressed. At the right temperature and compression, the gas becomes liquid. By turning natural gas into LNG, the volume is reduced 600 times, making it possible to the gas over long distances by ships or trucks. When LNG reaches its destination, it is returned to a gas in a regasification facility. It can then be piped to and used by rural homes, businesses that are connected to a local distribution grid, or used on-site at larger industrial complexes. LNG has several advantages. Rural towns and regions may be located far away from gas resources. Transporting gas by pipeline to those areas can be costly and impractical. Because it is easy to, LNG can serve to make gas economical and accessible to those areas for which the construction of long-distance pipelines is uneconomical. BioPropane SHV Energy is set to become the first energy company ever to distribute BioPropane to its customers. SHV Energy plans to sell the BioPropane in several European markets which will be produced by Neste Oil at its Rotterdam refinery. A recently signed agreement cover the supply of 160,000 tonnes of BioPropane over a fouryear period is the first of its kind anywhere in the world. BioPropane is propane created from renewable feedstocks such as plant and vegetable waste material. In use, it is identical to conventional propane and therefore has the benefit of being able to be blended and used by all existing appliances. SHV Energy is always looking at ways to reduce the carbon footprint of our products and activities. LPG is already a low-carbon fuel, but we believe that the production and distribution of BioPropane can really help to reduce the environmental impact even more. In addition, BioPropane is a great opportunity for SHV energy to lead the LPG business towards a more sustainable future. LNG is a low carbon fossil fuel compared to oil and coal. However, due to production, storage and ation, associated greenhouse gas emissions tend to be higher than natural gas that is not liquefied and ed via the mains gas grid.

8 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 9 SUSTAINABILITY ENGAGING WITH STAKEHOLDERS SHV Energy companies have a deep commitment to operating in a sustainable way. The theme of this approach is Better Cleaner Together. We believe we can contribute to a cleaner planet, by working together with our stakeholders thereby building a better performing business. Better Cleaner Together will guide us in reaching our ambition to become a leading, global and sustainable brand for the off grid energy market. Why sustainability? Sustainability is all about how we live our lives and run our business. We are a family owned company. We therefore think long term rather than in quarterly results. The very notion of sustainable thinking is in line with our company strategy. Sustainability is not just part of our business, it is our business. This is what sustainability means to us at SHV Energy: As an energy company we can really make a difference Sustainability means strategy & culture hearts & minds Sustainability also means growing our business to add value for our people & our planet Sustainability is about changing our behaviour and helping others to change We believe that by focusing our combined strengths, we can: Continue building an ever better performing business Contribute to a cleaner planet Bring our people, our suppliers and our customers as well as other stakeholders together to achieve these goals Better Cleaner Together will guide us in reaching our ambition to become a leading, global and sustainable brand for the off grid energy market. Our principles of sustainability Involve all employees, enable them to pay their contribution in their everyday activities in an inspirational & fun way Enable group wide participation Measure - improve communicate at all levels Reward rather than comply SHV Energy has the ambition to become a leading, global and sustainable brand for the off grid energy market. The sustainability ambitions fit into the innovative spirit of SHV Energy sustainovation. SHV Energy believes that innovation and sustainability are strongly linked: sustainovation. Innovation will not happen when you lock up smart people in a room. We want to Involve all employees and enable them to share and implement ideas. We are have set up a digital platform that structures the process and facilitates collaboration and interaction. This sustainovation hub is an online tool where our employees can post ideas to address a specific challenge. At the end of 2014, a stakeholder research among sustainability and energy experts was conducted for SHV Energy. The purpose of this research was to collect fresh perspectives from the outside on how SHV Energy could take strategic steps in further increasing the sustainability of the company and the market in which it operates. Special point of attention within this research was how SHV Energy can connect with stakeholders to strengthen its sustainability journey. Based on this stakeholder research, the conclusion was that SHV Energy is well positioned as a provider of rural energy and that SHV Energy is n the right track with its Better-Cleaner-Together strategy to become a leading company in the field of sustainability. Therefore SHV Energy will engage more on existing sustainability platforms, by partnering with leading sustainability organisations and start strategic stakeholder dialogues. The main objective is to gather insights that can be used to constantly evaluate the Sustainability growth strategy of SHV Energy.

10 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 11 OUR FOOTPRINT Introduction For the third year in a row, SHV Energy has measured its corporate carbon footprint. This is believed to be the largest footprint-exercise ever conducted within the LPGdistribution industry. Some 1,500 data for 2014 operations were collected from more than 20 business units, then compiled, computed and compared to their 2012-13 benchmarks (restated). SHV Energy defined its scope of operations as those of LPG-distribution, from terminal-to-delivered-tank. The supply footprint (production and primary ) is not included. The 2014 total carbon footprint of SHV Energy s LPG-distribution operations is calculated to be 484 thousand tonnes of carbon dioxide (CO 2 ), up from 476 thousand in 2013 (restated). This equates to a unit footprint of 73 kilogrammes CO 2 per tonne of LPG sold to third parties, up from 71 in 2013. The absolute increase of 8 thousand tonnes, or 1.7%, is mainly due to an increase in the footprint of primary and secondary distribution of cylinders most of which occurred in Brazil. 1.1 Carbon footprint of LPG distribution The 2014 total carbon footprint of SHV Energy s LPG-distribution is 484 thousand t CO 2, which is a unit footprint of 73 kg CO 2 /t LPG sold to third parties. The following subsections present this LPG-distribution carbon footprint in five ways: by function, by business type, by energy type, by distribution scope and scale, and by region. 1.1.1 Carbon footprint, by function Between eight- and nine-tenths of SHV Energy s footprint is caused by product emissions. The rest is split mainly between filling plants and overheads, with a minor fraction to storage (Figure 1). Figure 1: carbon footprint by main function LPG-distribution carbon footprint is mainly This report marks the first time that SHV Energy has presented data on water consumption. In both 2013 and 2014, about 50 litres of water were consumed per tonne of LPG sold to third parties. 6% 3% The first subsection of this chapter presents the LPG-distribution footprint in detail. The second compares 2014 to 2013. 7% THE LPG SUPPLY CHAIN EXPLAINED Primary Distribution Secondary Distribution All REFINERY Overhead FILLING PLANT /DEPOT MAJOR STORAGE Filling plants All storage CYLINDERS BULK LARGE WHOLESALE CUSTOMERS 84% SMALL WHOLESALE END CONSUMER END CONSUMER

12 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 13 Product- emissions are dominated overwhelmingly by road vehicles, with minor contributions from railcars and barges (Figure 2). Looked at more closely (Figure 3, which is a more-disaggregated version of Figure 1), it can be seen the single largest component is cylinder, which accounts for half of the entire footprint. Transport of bulk LPG accounts for one-third of the footprint. Overheads and filling plants each account for a bit more than 5% of the total, with storage (in terminals and depots) creating the remaining 3%. Figure 2: carbon footprint by type Figure 3: carbon footprint by function ( / STORAGE) Road dominates the distribution footprint Cylinder and bulk predominate 2% 0.2% 6% 2% 1% 7% Cylinder Road Bulk Overhead Rail Barge 31% 53% Filling plants Terminals Depots Production 98% Footprints by product type vary, mainly because of the amount of required per quantity of LPG sold. As it turns out (Table 1), the average footprint per tonne of cylinder LPG is about 2.5 times that of bulk LPG. This in turn is some 9 times greater than the footprint of wholesale LPG. TABLE 1: CARBON FOOTPRINT, PER BUSINESS TYPE, KG CO 2 PER TONNE LPG Business type Footprint Scope Cylinder 123 From terminal through delivery to retailer. Does not include customer, from retailer onward. Bulk 53 From terminal to customer tank. Wholesale 6 Storage and overheads only, assumes no i.e. customer picks up loads at the SHV terminal or depot.

14 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 15 In its finest granularity (Figure 4, an even-more-disaggregated version of Figure 1 than Figure 3 is), the relative contributions of primary and secondary of bulk LPG and cylinders can be seen more clearly. 1.1.2 Carbon footprint, by business type Given the differences in business-type footprints (Table 1), the disproportionate contributions to the total LPG-distribution footprint (Figure 5) are not surprising. Bulk and cylinder sales contribute about 80% of sales volume. However, cylinders contribute nearly three-fourths of the total footprint, while bulk accounts for about one quarter. Wholesale s footprint is only 2% of the total. Cylinder footprints are higher, because their economies of scale are lower. Figure 4: CARBON FOOTPRINT BY FUNCTION (COMPLETE DISAGGREGATION) Figure 5: CONTRIBUTIONS TO SALES AND FOOTPRINT, 2014 Cylinder more carbon-intensive than bulk Cylinders contribute disproportionately more footprint than bulk or wholesale 1% 1% 2% 6% 80% 70% Sales volume 6% 60% 50% Footprint 32% Cylinder secondary 40% Cylinder primary 30% 14% Bulk primary Bulk secondary Overhead 20% 10% Filling plants 0% Terminals Bulk Cylinders Wholesale Cylinder depots Bulk depots 16% 22%

16 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 17 1.1.3 Carbon footprint, by energy type SHV Energy s carbon footprint is an energy footprint. That is, the footprint consists purely of emissions caused by energy consumption. Most of this energy is consumed (Figure 6) in ing LPG, mainly in heavy-goods vehicles. Therefore, the primary energy type responsible for the footprint is diesel, which is also consumed, to a lesser extent, in terminals, depots and filling plants. After diesel comes gasoline, which powers automobiles and vans for deliveries, sales and administration. Then comes electricity, which powers storage filling operations as well as offices. The footprints of LPG, natural gas and heating oil consumption are very minor. Employee air travel and train travel have been classified as energy types, because direct fuel consumption data for these are not available in any case, together they account for less than 1% of the corporate footprint. 1.1.4 Carbon footprint, by distribution scope and scale Business units with sparser customer distributions and greater integration (backward to terminals, forward to cylinders) report higher per-tonne-lpg footprints than those with denser distributions and less integration. 1.1.5 Carbon footprint, by region By geography (Figure 7), the largest regional footprint comes from South America, followed by Europe, with Asia in distant third. Figure 6: carbon footprint by energy type Figure 7: carbon footprint, by region Diesel is the predominant energy used South America and Europe dominate the distribution carbon footprint 6% 2% 1% <1% South America s footprint is roughly equal to that of Asia and Europe combined, thanks to significantly-greater distances and a cylinder-heavy business. 9% 13% Diesel Gasoline Electricity LPG South America Natural Gas Train Travel 40% 51% Europe Air Travel Heating oil Asia 77%

18 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 19 Figure 8: 1.2 Comparison of 2014 to 2012-13 In 2014 SHV Energy s total LPG-distribution footprint was 1.7% greater in 2013, and 2013 s was 1.9% greater than 2012 s. The three functions contributing to the increase (Figure 8) are cylinder secondary, cylinder primary and bulk secondary. carbon footprint by function OUR CUSTOMERS Sustainability goes beyond our operations. Every day, we help customers make the switch from polluting solid or liquid fuels to cleaner energy solutions. Here are some of their stories. Comparison of 2013 and 2012 footprints (restated), LPG distribution 160 Carbon dioxide equivalent [kilotonnes] 140 120 100 80 60 40 20 0 2012 2013 2014 IRELAND: Calor Baird McNutt: OIL TO LPG CONVERSION Terminals Bulk primary Bulk depots Bulk secondary Filling plants Cylinder primary Cylinder depots Cylinder secondary Overhead Ocean-ship As already noted, the unit footprint (i.e. kg CO2 per t of LPG sold) of cylinders is 2.5 times higher than that of bulk (Table 1). This means that absolute-volume results can be skewed seriously by shifts in the business mix between bulk, cylinder and wholesale. And that mix can be influenced only in part by SHV. To eliminate the skew caused by the business-mix shift, we compared the footprints on an equivalent-volume basis. In other words: what would the footprints have been, had we used the same volume proportions in both years? On this equivalentvolume basis, for 2012-14: bulk footprint is steadily declining, cylinder footprint is steadily rising and wholesale footprint is holding almost constant (Table 2). TABLE 2: EQUIVALENT-VOLUME FOOTPRINTS 2012 AND 2013, LPG-DISTRIBUTION (kt CO 2 ) Business type 2012 (restated) 2013 (restated) 2014 Bulk 124 121 117 Cylinder 334 346 358 Wholesale 9 8 9 Sum 467 476 484 Baird McNutt Irish Linen is steeped in tradition and knowledge, gained over 100 years of industry experience. They pride themselves in using traditional Irish methods to produce the highest quality material and their Irish linen is renowned amongst designers worldwide. The production process is fairly energy intensive and the company used to rely on coal fires boilers and later heavy fuel oil. Recently Baird McNutt converted to LPG to generate the steam needed in the production process. The new boiler was up and running in three days and emits virtually no soot which reduced maintenance time servicing costs. The conversion also helped reduce the company s carbon footprint by 20% which is important for Baird McNutt and its customers. Moreover, energy costs have been reduced by 12% which helps the company remain competitive on the global market. CASE STUDY

20 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 21 Daylan Lagoon: MARINEGAS Guangzhou: CLEAN PUBLIC TRANSPORT TURKEY: Ipragaz CHINA: SHV China SHV (China) operates ten LPG service stations in Guangzhou and supplies more than 8000 taxis and 2000 busses on a daily basis. The LPG we supply saves taxi and bus operators money and contributes to improving air quality. We have also started to invest in LNG stations in Guangzhou. The Guangzhou government has recognised our contribution to making public more sustainable. CASE STUDY Marinegas is a clean alternative to diesel and petrol. Using Marinegas eliminates the risk of water pollution and reduces emissions. Dalyan Lagoon is located in Southwestern part of Turkey. Within the lagoon, there are many rivers and lakes which are tied together by canals and are linked to İztuzu beach. Köyceğiz Lake and Dalyan canals are protected by both Turkey and EU. This region is one of the 7 rare natural beauties of the world. It is rich in biological diversity and has a sensitive canal and lagoon ecosystem. Its rich biodiversity includes mullets, sea bass, turtles and blue crabs. A tourist hub The region welcomed 800.000 tourists in 2010. Most tourists visiting the area use touristic boats to go around the canals and admire the natural beauty. This activity is an important source of income for local communities. There are approximately 750 active boats out of which 500 are officially registered to local cooperatives. Most of these boats run on diesel which causes a range of issues amongst which we can count noise and water pollution. Ipragaz worked with the local ation cooperative to develop a solution that would provide operators with the power performance and low noise levels they need, combined with a fuel that is not harmful to the ecosystem, all at a reasonable cost. The solution, using LPG eliminates the risk of spillage, reduces noise and vibrations and eliminates bad odours produced by diesel engines. LPG as a solution The Marinegas conversions are currently being tested in cooperation with partners engine manufacturers, local cooperative etc. and university researchers. The initial tests have been very successful and we believe Marinegas can play an important role in preserving the biodiversity and natural beauty of the Dalyan Lagoon. Benefits of LPG Environment benefits: Our supply of LPG in Guangzhou City, has led to a substantial decrease in diesel and petrol consumption. This equates to an annual decrease of 22.000 tonnes of CO 2 and 417 tonnes of particulate matter. Economic benefits: Taxis that use LPG instead of gasoline can save 2000 to 4000 RMB per car each month. Furthermore, buses have decreased their fuel consumption by almost 20%.

22 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 23 Noble Foods: DUAL FUEL FOR TRANSPORT Residencia Fátima: REDUCING THE CARBON FOOTPRINT United Kingdom: Calor SPAIN: Primagas Energía Dual fuel systems have given us the best of both worlds, lower fuel bills and lower CO 2 outputs and maybe further capital savings in the future. Michael Tucker CASE STUDY Noble Foods main site near Newark-on-Trent is the largest free range egg packaging facility in the world. Built in 1974 it now operates seven days a week, 365 days a year grading three million eggs every day. Across the whole of Noble Foods group, 72 million eggs are graded, packed and delivered each week to all the UK s major supermarket chains. The Challenge To facilitate this enormous logistics exercise Noble Foods operates more than 200 vehicles from seven sites across the UK all working around the clock. The combined fleet travels over 11 million kilometres per year, consuming three million litres of fuel. The challenge was to improve efficiency and reduce cost. The Drive for Efficiency Since 2011 Noble s 50 articulated trucks have been pioneering dual fuel technology which automatically adjusts the blend of LPG and diesel used according to the vehicle s load and road topography with the aim of delivering optimum fuel efficiency. Fuel And CO 2 Savings To date LPG represents approximately 30% of the total fuel consumption. That 30% translates into a 14% overall saving on fuel bills plus a 6% reduction in CO 2. Positive Conclusions The move to dual fuel systems has clearly paid off for Noble Foods. and this initiative can be copied fairly easily, says Michael, It s cost- effective, and involves little capital. It also delivers improved carbon emissions, but the big reason to make the move is the financial saving, the size of which has surprised even me. Our success was due to having the right trucks, the right monitoring, and the right drivers. We began double-shifting the trucks, six days a week, and the proportion of cheaper LPG usage rocketed! I m surprised more people aren t doing it. Perhaps it s because it s fairly new and requires project planning. The payback is under 12 months and in fact we had one truck pay for itself within eight months. We at Primagas Energía believe this to be one of our most interesting, but at the same time challenging, conversions from oil to liquefied petroleum gas (LPG) of 2014. Is Residencia Fátima, a retirement home located on the outskirts of Madrid in a town called Galapagar, and the largest of three familyowned residences. Together, the three retirement homes have the capacity to look after 150 people. Fátima and Fuenteverde combined were using 50,000 litres of oil every year. Initially, the project involved changing the energy source (from oil to LPG) at Fuenteverde, but our sales representative saw a great opportunity at Fátima. After successfully completing the first project at Fuenteverde, which entailed replacing an oil-powered boiler with an LPG-powered one, they began to think about how they could acquire a cleaner and cheaper source of energy for Fátima too. A deliberate choice What came as a surprise was the fact that the owner of Fátima did not want natural gas, despite it being the easiest to install. She wanted LPG because of its greater calorific value, which would allow the stove in the kitchen to function better for cooking. They agreed to replace the entire oil boiler room, along with the gas cylinders from the kitchen, with an LPG solution. Fátima and Fuenteverde will now consume 28 tonnes of LPG instead of the massive amounts of oil they used to need. This translates into an approximate reduction of 17 tonnes of carbon dioxide and cost savings amounting to 7,000 a year. It will also provide them with greater comfort and a better service. This is one clear example of how we can achieve our objective of making cleaner and cheaper energy available to everyone.

24 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV ENERGY 2014 SUSTAINABILITY REVIEW I 25 M/S Gem Wire: CONVERSION FROM AN ELECTRIC SOURCE TO LPG Social housing: MICRO CHP INDIA: Supergas FRANCE: Primagaz CASE STUDY In 2014, SHV and its furnace manufacturer partner, M/S Knackwell Engineers, converted the wireannealing furnace of M/S Gem Wire Industries from electricity to liquefied petroleum gas (LPG). Background M/S Gem Wire Industries is in the business of copper and aluminium wire manufacture for use in motor windings, but was having recurrent problems of coil maintenance in the electric furnace. Indeed, the breakdown rate was as high as once a fortnight. The company was aware of natural gas, but not able to get a foot in the door due to the high security deposit required. This was the perfect opportunity for us to educate the customer on the benefits of LPG. We had the support of their furnace supplier to make a pitch for conversion to LPG. Conversion We, along with the partner, M/S Knackwell Engineers, convinced the prospect of the benefits of LPG, including lower maintenance requirements and cost savings. The customer agreed and our partner converted the electric furnace to LPG by redesigning it and making the necessary modifications, taking into account elements like recirculation of air and burner position. The SHV team helped the customer with various aspects of design and fuel plan validation, in association with M/S Knackwell Engineers. The customer is now reaping the rewards of conversion, with no more breakdowns, leading to higher production rates and overall savings in energy costs of more than 30%. We were led by our firm belief in seizing the opportunity and creating a niche for ourselves, in line with our vision statement looking to provide efficient energy solutions through LPG in a sustainable way. Primagaz recently equipped homes in a social housing project with a solution that will substantially reduce energy and power consumption. The homes, located in Bretagne, will benefit from state of the art Micro CHP technology. Micro Combined Heat and Power (micro CHP) systems simultaneously produce useful heat and power from a single compact unit fitted inside the building they supply.they have several environmental and economic advantages. On the one hand, fuel is used more efficiently compared to installations that produce either heat or electricity as the waste heat from the generation of electricity is used on site. This reduces fuel expenditures. On the other hand, as electricity is produced right where it is consumed, the energy losses from transmission and distribution of power are reduced. This results in an increase of the overall efficiency of energy supply and a substantial reduction of CO 2 emissions. Effectively, a micro CHP unit replaces a (conventional) heating boiler, providing heat and hot water as usual, but additionally also providing some of a building s electricity needs. The solution For this particular housing project, a Cogengreen Micro CHP unit with a 21Kw engine producing 7.5 Kw of electricity was installed. The installation was also equipped with a smart metering system. The electricity generated from the unit is used to power the common areas and lift and excess electricity is sold to the power grid generating additional savings for the tenants. The benefits The electricity produced is 40% cheaper than power and generated a CO 2 reduction of 47% to 83% as well as reducing the energy needed for water heating. This project is the first energy efficient social housing project in France that combines Micro CHP with smart metering and is sure to be an example for future developments.

26 I SHV ENERGY 2014 SUSTAINABILITY REVIEW FUTURE REPORTING We are committed to report on our carbon footprint and water usage on an annual basis. This year we will start measuring the CO 2 savings we make with our customers. Our customers often live or work in rural areas beyond the natural gas grid. These rural areas are faced with a series of energy challenges such as a higher usage of polluting fuels which causes a higher carbon footprint and a decrease of air quality. We help our bulk customer to switch from those polluting fuels such as oil and coal to LPG or LNG. To enable the measurement of the CO 2 savings within customers a workbook has been developed. Next year we will report on these savings in our 2015 Sustainability Review. Gas Supply & Risk Management

028 I SHV ENERGY 2014 SUSTAINABILITY REVIEW SHV Energy N.V Taurusavenue 19-2132 LS Hoofddorp - The Netherlands T +31 (0) 23 5555 700 - F +31 (0) 23 5555 701 - E info@shvenergy.com www.shvenergy.com