www.hexagon.no

JAPAN-NORWAY HYDROGEN SEMINAR

“Collaboration within hydrogen future market and value chain”

Venue: Norwegian Embassy in Tokyo

Date: February 28, 2017

• Brief introduction of Hexagon Composites

• International collaboration on development of regulation, codes and standards for storage of high pressure compressed hydrogen

Per S. Heggem

Director, RCS and Hydrogen Products

Hexagon Composites

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www.hexagon.no

HEXAGON COMPOSITES GROUP

• Headquartered in Aalesund, Norway ˗ facilities in Germany, Norway, USA, Canada and

Brazil

˗ sales offices in India, Singapore and Russia

• 776 employees˗ of which 412 employees in Agility Fuel Solutions

(50% JV)

• Listed on Oslo Stock Exchange (OSE:HEX) ˗ market cap of approx. EUR 520 million

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High growth technology company manufacturing composite pressure tanks and assembling systems for storage of LPG, natural gas and hydrogen

www.hexagon.no

HEXAGON BUSINESS AREAS

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LIGHT-DUTY VEHICLESMOBILE PIPELINE® HYDROGEN PRODUCTSLPG CYLINDERS HEAVY-DUTY VEHICLES

HIGH-PRESSURE

CNG & H2

LOW-PRESSURE

LPG

AGILITY FUEL

SOLUTIONS (50%)

www.hexagon.no

KEY STRATEGIC DEVELOPMENTS IN 2016

• Mitsui & Co. made an investment in Hexagon

Composites and became the largest shareholder

(25%). Similtanously a strategic alliance was

announced

• Agility Fuel Systems and Hexagon Composites’

CNG Automotive Products Division merged to create

Agility Fuel Solutions (50% owned)

• Hexagon Composites acquired xperion Energy &

Environment and strengthened its position in the

composite pressure cylinder market

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www.hexagon.no

EXPANDING OUR GEOGRAPHICAL FOOTPRINT

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Aalesund, Norway

Headquarters

Kassel, Germany

High-pressure cylindersNizhny Novgorod, Russia

Sales office

Singapore

Sales office

Bangalore, India

Sales office

Barcelona, Spain

Sales representative

Klagenfurt, Austria

Sales representative

Sao Paolo, Brazil

Agility Fuel Solutions

Taneytown, Maryland

MasterWorksLincoln, Nebraska

High-pressure cylinders

Lincoln, Nebraska

Agility Fuel Solutions

Heath, Ohio

High-pressure cylindersKelowna, BC, Canada

Agility Fuel Solutions

Santa Ana, CA

Fontana, CA

Agility Fuel Solutions

Nashville, TN

Agility Fuel Solutions

Salisbury, NC

Agility Fuel Solutions

Anniston, AL

Agility Fuel Solutions

Raufoss, Norway

Low-pressure cylinders

High-pressure cylinders

Raufoss, Norway

Agility Fuel Solutions

Hexagon Group administration and production sites

Sales offices and representatives

Agility Fuel Solutions (50% JV)

Copenhagen, Denmark

Sales representative

The extended Hexagon Composites Group

totalling 776 employees

Arnheim, Netherlands

Sales representative

Paris, France

Sales representative

www.hexagon.no

ABOUT MITSUI & CO. LTD

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138

Number of Offices

and Overseas

Trading Subsidiaries 43,611

Number of

Employees

(consolidated)

462

Number of Subsidiaries

and Equity

Accounted Investees

65Global Network

countries/regions

(As of March 31, 2016)

(As of Feb 1, 2017)

(As of Feb 1, 2017)

www.hexagon.no

Mitsui & Co investment Details in

Hexagon Composites:

25% ownership

Strategic alliance agreement Covers all Business Units

MITSUI & CO AND HEXAGON COMPOSITES

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• Alliance secures a valuable and

long-term minded partners

• Directly leverage the Hydrogen

opportunity

• Global footprint, geographic reach and

leverage

• Hexagon Composites, Mitsui & Co.,

and Toray Industries commenced a

business viability study of a proposed

JV to manufacture and sell high-

pressure cylinders for hydrogen

vehicles in Japan

www.hexagon.no

STEEL TO COMPOSITE – THE EVOLUTION

Volume

Weig

ht

Steel bottle trailer

Steel tube trailer

TITAN™ XL

TITAN4™

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www.hexagon.no

CHALLENGES RELATED TO EXISTING REGULATION CODES AND STANDARDS (RCS)

Transport of compressed hydrogen

CAPEX and OPEX must be reduced, which today can be achieve by˗ Increase in pressure

˗ Use of larger cylinders in combination with smaller cylinders to utilize space available

(weight is a limiting parameter for metal based cylinders)

˗ More adequate safety margins

Doing this under the argumentation that hydrogen is the driver, is a challenge

by it self (some would say three impossibilities in one when combined with

hydrogen), but they can all be controlled in an acceptable way, leading to

safe(r) products.

Restrictions on pressure and volumes varies. Some examples ˗ Japan: max 360L and max 450 bar with a safety margin 2,25

˗ Europe (ADR): max 3000L and no pressure limit, but safety margin 3,0

˗ US: DOT special permit on cylinders up to 8400L

(Note: 3000L was back in history determined as the largest seamless metal cylinder that could be

made. Composite cylinders has opened up for unlimited size of cylinders)

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www.hexagon.no

ONGOING DEVELOPMENT RELATED TO TRANSPORT OF COMPRESSED HYDROGEN

• ISO 17519 is the first ISO cylinder

standard that combine requirements to

cylinders and frames/containers.˗ The standard is developed under leadership

of Standard Norway. Final ballot before

publication estimated to take place Q3-2017

˗ 9 countries has nominated experts to the

working group. Japan has listed JISC as

document monitor. So far Japan has

abstained from voting.

˗ Support from as many as possible ISO

member states is need. Japan is very

welcome to cast a positive vote, contributing

to an significant improvement on RCS related

to transport of compressed hydrogen.

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www.hexagon.no

HYDROGEN REFUELING STATIONS (HRS) – HIGH PRESSURE STORAGE

• Hydrogen refueling stations require at least a part of the storage capacity to be at 950 bar or higher to be able to top fill FC-vehicles within the desired fill time of 3 minutes.

• Each fill will create a pressure cycle.

• With only a few vehicles coming in for refueling each day, number of fill cycles is not an issue, but in the near future a medium sized HRS should be able to serve at least 100 vehicles per day. Over desired lifetime of an HRS this will create 100x365x20= 730.000 pressure cycles. Mostly small amplitudes, but at a high mean stress level, creating issues for cylinders using fatigue sensitive materials.

• Existing RCS require cycle testing with deep cycles (all cycles go from near empty cylinder to maximum developed pressure (worst case pressures) – ref USA-based ASME and Japan based TD 5202 . It will take tremendous time and cost to qualify cylinders for lifetime service unless there will be a significant change in the referenced requirements. The alternative is to accept recurring cost (replacement of cylinders several times over the lifetime of the HRS).

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www.hexagon.no

ONGOING DISCUSSIONS RELATED TO HIGH PRESSURE STORAGE AT HRS

• Is a leak in a 950 bar cylinder an acceptable failure mode?˗ Argument for a yes: better with a leak before a burst (LBB)˗ Argument for a no: if a leak occurs, a huge amount of hydrogen will start leak,

and it will not be possible to control the release rate (can be very high)˗ Right answer is most likely to use a cylinder design that will not leak or burst over

the lifetime of an HRS (ref example leading to 730.000 cycles) without leak or burst as failure mode.

• Requirements to metals exposed for high pressure hydrogen.˗ Japan require stainless steel qualities in accordance with SUS 316 (high Ni, high

Nieqv in combination with a Ra-requirement) – with significant added cost compared to materials in accordance with other standards commonly accepted in other countries.

˗ The requirements should be the same all over. Not good having too demanding requirements and not acceptable with requirements that does not make safe products.

˗ Years of research in USA, Germany and Japan has not yet come up with a clear conclusion. The next challenge will be to harmonize relevant RCS on a global basis.

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www.hexagon.no

TECHNOLOGY FOR STORAGE AT HRS IS READY - RCS ARE NOT READY

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• Hexagon Composite introduced 95MPa - 255L cylinder for the HRS market in 2010, type

approved in accordance with the European Pressure Equipment Directive (PED) for use in all

European countries. Later on in Japan in accordance with the JIGA rules for use on mobile

(only) HRS.

• In the meantime new rules is developed in Japan (TD 5202). Test requirements is un-realistic

and can not be used for qualification of cylinders intended for real use when number of FC-

vehicles increase.

• Without knowing what the near time rules will require, introduction of new technology can

easily stop up.

www.hexagon.no

COMPOSITE CYLINDER FIRE PROTECTION

NEW SAFETY STRATEGIES NEEDED

Basic principle

• Determine actual remaining strength of composite material use over time in fire.

• Focus on trigger and pressure release system strategy, also taking into consideration what energy the surroundings can safely receive

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Requirements to be based on demonstration, either by calibrated

simulation models or practical testing, that the combination of specific

composite material and a specific trigger/pressure relief system match

each other, so that the hydrogen storage will stay safe in a fire at/on the

application the composite cylinder is intended to be used in.

www.hexagon.no

• A break through/modernization of RCS is needed. Too much of the RCS for hydrogen applications is still based on carry over from other than composite materials, other gases and lower pressures than what hydrogen require.

• Lack of relevant Regulation, Codes and Standard is a hinder for international market development (GTR 13 and SAE is the only exemption so far).

• The industry needs a break through on RCS topics related to Composite Cylinders used for transport and storage of larger quantities of compressed hydrogen.

REGULATION, CODES AND STANDARDS FOR

HIGH PRESSURE HYDROGEN APPLICATIONS

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International collaboration on pre-normative research and international

harmonization of RCS is needed before a real global deployment of

hydrogen will take place in the public domain.

www.hexagon.no

THANK YOU FOR YOUR ATTENTION