Environmental

Environmental Commitment

Kirby recognizes the importance of efficiently meeting the waterborne transportation needs of the United States in an environmentally sound manner. Management and the employees of Kirby pledge to:
9
Conduct our business and operate our vessels in a manner that protects the environment and the health and safety of our employees and the public
9
Recognize and be responsive to public concerns about waterborne transportation and its effects on the environment
9

Make safety, health and the environment a priority in our business planning and risk management

9
Commit to reduce overall emissions and waste generation, and comply with all laws and regulations concerning emissions and waste
9
Participate with government and the public in creating responsible laws, regulations, and standards to safeguard the workplace, community, and environment
9
Establish and maintain, in cooperation with public authorities and others, emergency preparedness procedures and plans to mitigate the effects of accidents which may occur

“Do the Right Thing” is a key Kirby value

5
From an environmental and human impact perspective, safety is the foundation
5
Our philosophy is that we are managing for success in perpetuity
5
We invest in training and developing our workforce
5
We promote sound public policy for our industry segments

Marine Transportation is a Good News Story

Marine transportation is the most environmentally friendly mode of surface transportation in the U.S., with far fewer impacts than truck or rail.

Marine Transportation – GHG Emissions

~99% of Kirby’s emissions are from the marine transportation fleet

Emissions Performance (2015 to 2020)

9

Since 2015, total CO2e emissions have declined 12% despite significant growth in the fleet

– Total barrel capacity up 17%
– Result of inland acquisitions offset by offshore fleet retirements
– Diesel consumption declined 11% ‘19Y/’20Y
primarily due to reduced activity associated
with the COVID-19 pandemic

9

Investments in newer boats and engines have improved overall fuel efficiencies and reduced emissions

9

Since 2015, average age of inland boats is down 14
years and offshore boats is down 12 years
Emissions Reduction Target (2015 to 2024)

9

In 2020, Kirby met its 25% emissions reduction target early as a result of the COVID-19 pandemic and the associated reduction in economic activity

9

Given 2020 was an unusual year, the Company expects its activity and total emissions will increase in 2021 as the economy recovers

9

Overall, Kirby emissions are expected to decline 25% per barrel of capacity by 2024

Kirby Corporation – GHG Emissions Summary

Scope 1 Emissions Performance

9

~99% of Kirby Corporation Scope 1 GHG emissions come from the operation of the marine transportation boat/barge fleet

9

Ultra low sulfur diesel fuel consumption and CO2e emissions have declined 12% since 2015 despite significant growth in the number of vessels in
the fleet
– 2018: Higman, Targa, CGBM acquisitions added ~5.4 million barrels of capacity and 75 towboats
– 2019: Cenac acquisition added ~1.8 million barrels of capacity, 34 towboats, and 2 offshore tugboats
– 2020: Savage acquisition added ~ 2.5 million barrels of capacity, 45 towboats

9

Emissions data reporting project launched in 2020 to better understand Kirby’s emissions footprint on a micro level

Scope 2 Emissions Performance

9

100% of Scope 2 energy is consumed from the grid

9

Signed a 36-month agreement for 100% green e-certified energy in April 2020 for all Kirby marine transportation facilities in Texas
– ECO Solutions Champion issued ~3,000 renewable energy certificates in 2020; 100% renewable representation
– 12% of Scope 2 energy is renewable
– *2020 Scope 2 excludes 3,000 MWh of electricity consumed from renewable sources

Mitigating our Impact on the Environment

9
At Kirby, no spill is too small – all cargo spills, even if only 1 drop, are recorded and reported.
9

Cargo spills to water have declined to 0.12 incidents per 1,000 cargo transfers – representing an 84% decrease since 2002

9

Kirby is committed to continuous improvement through cargo transfer audits, regular tankerman proficiency evaluations, advanced training courses, review and implementation of best practices, review of near-miss events, and quarterly tankerman meetings

9

In 2020 more than 5,500 cargo transfer audits were completed, representing ~14% of all cargo transfers

Boats by Tier

In the last 20 years, Kirby’s investment strategy has reduced Tier 0 engines by 98%. In the last 20 years Kirby’s investment strategy has spent $500M+ on engines and boats.

NOx Case Study

In the last 10 years, Kirby has reduced Tier 1 engines by 37%, Tier 2 engines by 94%, and Tier 3 engines by 30%. As engine tier level increases, engines produce less emissions and become more efficient and environmentally friendly.

Engine Tier Strategy

Since entering the offshore market in 2011 Kirby’s investment strategy has reduced Tier 0 engines by 85%. In the last 5 years Kirby’s investment strategy has spent $200M+ on Tier 3 and 4 engines and boats

Ballast Water Management

In less than a decade, Kirby has installed ballast water treatment systems on 55% of its fleet. By the end of 2024, Kirby will have all remaining vessels outfitted with ballast water treatment systems

Distribution and Services

Kirby manufactures technologies that significantly reduce the environmental impact of hydraulic fracturing

Electric Fracturing Units

9
E-frac units operate using natural gas turbines and electric motors, reducing their environmental footprint
9
Units operate on field gas that may otherwise be flared
9
Compared to conventional fracturing units, e-frac units:
– Reduce NOx emissions by up to 99%
– Reduce CO2e emissions by 32% and NO2 by 28%
– Reduce average sound pressure by up to 69%

Dual Fuel and Quiet Fracturing Units

9
Duel-fuel (DGB) fracturing units have up to an 85% diesel displacement rate when using natural gas
9
Units can operate on CNG, LNG, pipeline gas, and field gas that would otherwise be flared
9
Reduces trucking and road traffic associated with diesel fuel transportation to the wellsite
9
Noise reduction units reduce decibel levels by more than 3x (10+ dB noise reduction) compared to conventional frac units

Going Above and Beyond

  • Kirby implemented usage of ultra low-sulfur diesel on all vessels in 2012
  • All tank barges are double hulled to better prevent environmental spills
  • Voluntary usage of 6 psi vs. 3 psi vapor relief value settings on inland tank barges (the industry standard) significantly reduce cargo vapor emissions*
    – ~50% of Kirby’s fleet is fitted with 6 psi vapor relief values
    – Kirby has the largest 6 psi barge fleet in the U.S.
  • Company policy does not allow for the discharge of bilge overboard, even if the vessel is equipped with an oil-water separator
  • Large tank barge fleet reduces unnecessary emissions and waste
    – Dedicated product tows reduce barge cleaning between cargos
    – Smaller fleeting boats reduce fuel consumption and emissions
    – Linehaul service improves overall barge to boat ratio (Kirby 3:1, Industry 2:1)
  • Ongoing boat and engine replacement program improves efficiencies and reduces emissions
  • Barge cleaning facility operations goes beyond regulatory standards
    – Residual cargo recovery mitigates waste and efficiency of cleaning process reduces emissions by 98%
  • Kirby serves as a leader in numerous industry organizations that help define industry regulations and improve air and water quality

Electric Fracturing Units

  • E-frac units operate using natural gas turbines and electric motors, reducing their environmental footprint
  • Units operate on field gas that may otherwise be flared
  • Compared to conventional fracturing units, e-frac units:
  • Reduce NOx emissions by up to 99%
  • Reduce CO2e emissions by 32% and NO2 by 28%
  • Reduce average sound pressure by up to 69%
  • Largest manufacturer of frac units with Tier 4 engines, achieving higher EPA standards

  • Dual Fuel and Quiet Fracturing Units

  • Duel-fuel (DGB) fracturing units have up to an 85% diesel displacement rate when using natural gas
  • Units can operate on CNG, LNG, pipeline gas, and field gas that would otherwise be flared
  • Reduces trucking and road traffic associated with diesel fuel transportation to the wellsite
  • Noise reduction units reduce decibel levels by more than 3x (10+ dB noise reduction) compared to conventional frac units
  • Development of dry gel hydration units eliminates usage of mineral oil and/or diesel in slurries pumped into wells
  • Paint and solvent re-use and recycling reduces waste by-products by 95% and recovers 99% of solvents for re-use
  • LED lighting installed in key facilities to reduce energy consumption

Thermo King sells environmentally friendly products including:

ThermoLite® solar panels which deliver clean, reliable performance in a wide variety of applications, resulting in
longer battery life, decreased waste, lower fuel consumption and reduced emissions

Precedent® S-Series refrigeration units which achieve Evergreen CARB and EPA emissions compliance while
adding performance

TriPac® Auxillary Power Units (APUs) which meet Tier 4 EPA regulations and drive unit efficiency and productivity

Coldtainer – temperature controlled units which are made with technology and materials that are energy
efficient and eco-friendly that result in 40% reduction in CO2 emissions vs. Standard Refrigeration
*Awarded Top Green Provider in 2020 by Food Logistics*

Offshore Marine – Recycling & Responsible Practices

Environmental Management System

A core tenet to Kirby’s business is NO Harm to the Environment. This conviction drives the Company’s commitments, decisions, processes, plans, and procedures. Kirby’s NO Harm approach is critical to mitigating the inherent risks involved in moving liquid products across the waterways and operating a significant distribution and services business across a wide geography. The most notable risks in the Company’s operations include adverse weather conditions, marine accidents, and spills or releases into the environment. 

Weather conditions such as high or low water on the inland waterway systems, fog and ice, tropical storms, hurricanes, and tsunamis can impair the operating efficiencies of the marine fleet. Such adverse weather conditions can cause acute impacts, such as a delay, diversion or postponement of shipments of products, or equipment damage which are beyond the control of the Company. Similarly, weather volatility, flood, and tropical system events contribute to chronic conditions including waterway infrastructure damage, silting and other conditions that can negatively affect draft, and over time lead to constrictions in the width of navigable channels. In addition, adverse water and weather conditions can negatively affect a towing vessel’s performance, tow size, loading drafts, fleet efficiency, and limit navigation periods. The Company’s distribution and services segment is subject to tropical storms and hurricanes impacting its coastal locations and tornadoes impacting its facilities located in Oklahoma. These weather events can cause an interruption to the Company’s ability to provide repair and service to customers and can postpone order deliveries for new equipment.

The Company could also be adversely impacted by a serious marine casualty or spill event. A serious marine casualty or spill event could close a portion of the inland waterway system or a coastal area of the United States for an extended period of time. Although statistically, marine transportation is the safest means of surface transportation of bulk commodities, accidents do occur, and the impact can be substantial. The Company manages the risk of potential accidents and spills through the use of well-maintained and equipped tank barges and towing vessels, as well as through extensive safety, training, and environmental programs.

To guard against the risks presented by adverse weather, a marine accident, or spill event, regardless of cause, Kirby maintains a leadership role in emergency preparedness and contingency planning. The Company invests in an experienced internal Incident Management Team (IMT) comprised of employees with specific expertise in company operations to fill lead and back up rolls within the incident management structure, including the ability to support more than one team should more than one deployment be required. Kirby supplements the IMT with external subject-matter resources as appropriate. Kirby’s IMT routinely participates in emergency response drills and exercises to strengthen its skills and resources necessary to effectively respond in the event of an incident.  Annually, the company conducts extensive emergency training, drills, and simulations with employees, customers, emergency response professionals, and government agencies, both state and federal and including the U.S. Coast Guard. Kirby employees regularly attend the U.S. Coast Guard crisis management courses. Over the years, numerous Kirby employees have been recognized by the U.S. Coast Guard for Public Service Commendations and Meritorious Public Service Awards. 

Kirby’s diverse operations, varying geographic conditions, and inherent operating risks necessitate the use of an Environmental Management System.  Kirby employs a dedicated leadership team comprised of its Environmental Director, Safety Directors, Company executive officers (including the CEO), and experienced operations leaders to ensure our businesses are good stewards in the communities and environments in which we operate. Below are some of the responsible practices and programs that encompass Kirby’s Environmental Management System:

^

Corporate Environmental Policy & Commitments

– Compliance & responsible practices
– Supply chain integration
– Environmental training
^

Company Environmental Procedures

– Waste reduction
– Waste management
– Recycling
– Ballast water management
– Incidental vessel discharges (VGP)
^

Safety Leadership

^

Customer Communication

^

Review of Shipyard and Barge Cleaning practices

^

Environmental Metrics Tracking

– GHG emissions
– Liquid spills (includes any product outside containment)
– Vapor releases
^

Environmental Leadership

– Industry and trade organization involvement (American Maritime Partnership, American Waterway Operators, Chemical Transportation Advisory Committee, Towing Safety Advisory Committee)
– State and municipal organizations
– ECHO – Enhancing Cetacean Habitat and Observation Program