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Transitioning into EU MRV

The EU MRV (monitoring, reporting and verification) regulation 2015/757 entered into force on 1 July 2015 as part of the European Commission (EC)’s effort to reduce greenhouse gas (GHG) emissions from international shipping within the European Union (EU). The EU MRV Shipping Regulation applies to ships above 5000 GT irrespective of their flag and requires such ships carrying out maritime transport activities to or from EEA ports and at EU Ports to monitor and report information including verified data on their CO2 emissions from 1st of January 2018.

The legal framework for these obligations is established under Regulation (EU) 2015/757 on monitoring, reporting and verification of carbon dioxide emissions from maritime transport, (the MRV Shipping Regulation) which has been amended by Delegated Regulation 2016/2071 and it is to be read in conjunction with Implementing Regulations (EU) 2016/1927 & 2016/1928 and Delegated Regulation (EU) 2016/2072.

Several categories of ships are excluded, including: warships, naval auxiliaries, fish-catching or fish-processing ships, ships not propelled by mechanical means, and government ships used for non-commercial purposes

In accordance with the MRV Shipping Regulation, MRV companies are required to fulfill the following monitoring and reporting obligations for each of their ships carrying out voyages related to EEA ports:

  • By 31st August 2017, MRV companies shall submit a monitoring plan to a MRV accredited verifier. It consists of transparent and complete documentation of the monitoring method and procedures to be applied to each of their ships.
  • From 1st January 2018 (1st reporting period under the MRV shipping Regulation) MRV companies shall, on the basis of the ship’s satisfactorily assessed monitoring plan, monitor the ships CO2 emissions, fuel consumption and other relevant information with a view to aggregate data into an annual emissions report.
  • From 2019, by 30th April of each year, the MRV company responsible for the ship on 31st December of the reporting period is required to submit a satisfactorily verified emissions report, from the MRV accredited verifier, to the Commission using a dedicated Union information system (also called THETIS MRV database (still under development). MRV verifiers are required to indicate that the Emission report has been considered satisfactory so the conditions for issuing a Document of Compliance have been fulfilled.
  • From 2019, by 30th June of each year, ships which have carried out activities falling under the MRV Regulation during the precedent calendar year (reporting period) shall carry on board a valid MRV Document of Compliance (Doc), when calling at EEA ports. DoC is valid for a period of 18 months after the end of the reporting period.

The regulation will be enforced through port state control (PSC) within European ports.

The EU MRV regulation compliance cycle is described below and the responsibility for relevant task is shown in the below table:

Task

Responsibility

Prepare Monitoring Plan and submit to Verifier

Company

Assessment of Monitoring Plan

Verifier

Monitoring of Parameters

Company

Prepare Annual Emission Report and submit to Verifier

Company

Verify Annual Emission Report

Verifier

Submit verified Annual Emission Report to EC and Flag State

Company

Issuance of DoC

Verifier

Inform issuance of DoC to EC & Flag Administration

Verifier

MRV obligations are to be fulfilled on a “per ship” basis. The company fulfilling the MRV obligations is called the “MRV company”. The MRV company can be either the ship owner or any other organization or person, such as the manager or the bareboat charterer, who has assumed the responsibility for the operation of the ship from the ship owner. In this context, the company mentioned in the SOLAS International Safety Management Code could be responsible for MRV requirements. The MRV companies need to submit a monitoring plan for each of the ships operating under their responsibility to an accredited verifier. The monitoring plan is required to provide the fuel consumption monitoring method selected from one of the four methods mentioned below for each of the emission source (Main Engine, Auxiliary Engine, Boilers, Gas Turbines and Inert Gas Generator) and use the appropriate emission factor for the fuel type being consumed for calculation of CO2 emissions towards its reporting along with other reporting parameters including energy efficiency, quantities of cargo carried and distance travelled required to be reported per-voyage.

Fuel consumption monitoring methods:

  • Method A – Using Bunker Fuel Delivery Notes and periodic stock takes of fuel tanks (except for those vessels where cargo is used as fuel)
  • Method B – Bunker fuel tank monitoring
  • Method C – Flow meters for applicable combustion processes
  • Method D – Direct emission measurements

The MRV company is required to prepare monitoring plan using a template corresponding to the model in Annex I of the Implementing Regulation (EU) 2016/1927. Information concerning all mandatory items, as identified in the monitoring plan has to be provided.

Additionally, there are voluntary fields that might be relevant for certain ship categories, are identified in the monitoring plan model in Annex I to Regulation 2016/1927. These voluntary fields concern for example:

  • the ice class of the ship and procedures, responsibilities, formulae and data sources for determining and recording the distance travelled and the time spent at sea when navigating through ice, if applicable and
  • other procedures relevant to monitoring of fuel consumed and CO2 emitted such as the procedures for determining and recording the fuel consumption for dynamic positioning, or the average density of cargo transported.

Any changes by the MRV company are to be properly reflected in the monitoring plan.

The EU regulation applies to ships undertaking the following voyages:

  • From an EU port to a non-EU port;
  • To an EU port from a non-EU port;
  • Between EU ports and;
  • While the ship is at berth at an EU port

Undermentioned ship’s activities are defined as voyages:

a. originating or terminating in a port of call; and
b. serving the purpose of transporting passengers and cargo for commercial purposes

Ports of call are relevant as ending points / starting points of voyages. These are ports where a ship stops to load or unload cargo, or to embark or disembark passengers. Stops in ports which do not fulfil these conditions are not ports of call. For instance, if a ship stops in a port for the sole purpose of refuelling, obtaining supplies, relieving the crew, going into dry-dock or making repairs to the ship and/or its equipment. Besides the above, stops in ports due to the ship being in need of assistance, in distress or for the sole purpose of taking shelter from adverse weather or rendered necessary by search and rescue activities, are not considered ports of call.

Ballast voyages, from the last port of call where the ships have discharged cargo or disembarked passengers to the next port of call where cargo is loaded or passengers embark, also serve the purpose of transporting cargo and are therefore subject to the Regulation.

CO2 emissions in Union Ports including emissions arising from ships at berth or moving within a port are also required to be reported.

However, ships’ movements that do not serve the purpose of transporting cargo or passengers for commercial purposes are not subject to the monitoring, reporting and verification requirements, for example;

a) prospection and extraction of material from the seabed or subsoil;
b) ice-breaking activities;
c) carrying, laying, and repairing of cables/pipelines for underwater for telecommunications, electric power transmission, or other purposes;
d) providing support to offshore installations, such as drilling rigs‎, natural gas and oil platforms, offshore wind farms, and including in particular:

i. carriage and positioning of anchors for drilling rigs
ii. providing towage, salvage or other marine assistance/services to offshore installations,
iii. carriage of supplies and equipment to/ from offshore installations and ships;
iv. safety or rescue services provided to offshore installations,
v. diving support,
vi. storing oil or gas without processing it,
vii. installation and decommissioning of subsea structures and offshore installations.

Based on the approved Monitoring Plan, ships are required to report the following annual monitoring parameters:

Actions by the Company: Data collection takes place on a per voyage basis and starts on January 1, 2018. It will reoccur annually, from Jan 1 to Dec 31. The preparation for compliance need to commence prior to this activity by preparing a Monitoring Plan and to have it verified by an Independent Verifier. As the monitoring plan needs to be signed off by an independent verifier, therefore, companies are advised to have the plan submitted by August 31, 2017, at the latest. Having an approved monitoring plan is the first milestone for this regulation. The biggest challenge for the operator/shipping company to remain compliant is by ensuring data integrity throughout the data collection period.

Therefore, the first move for a company in its preparation should be to review the existing company procedures and conduct a gap analysis to meet EU MRV requirements. Few examples of identified gaps could be as below:

Data Integrity should be the focus: Company’s highest priority should be to ensure accuracy, enforceability and transparency in the monitoring and reporting process and making the EU MRV reporting (monitoring process) work as planned.
During submission of the emissions report, accredited verifiers will verify two main components:

1. Annual ship-specific emission report is in accordance with the approved monitoring plan
2. Accuracy of figures and calculation in annual reporting

To achieve the above IT systems and people in the Company being two key contributors should be considered as explained below:

IT Systems

Having the right IT systems in place plays a crucial role to perform the functions required for EU MRV compliance. Therefore, EU MRV requirements should be implemented into company’s in-house IT application on-board and business intelligence tools.

People

Procedures be established and training & data integrity awareness should be provided to ensure that the organization (on shore and at sea) move together in one direction.

Starting early is crucial as it allows to have sufficient time for data validation phase. Validation Rules need to be established and implemented with the aim of continuously fine-tuning to achieve the ideal system.

Having an early start allows for gradual transition to the existing noon report processes and its communication to the stakeholders. The priority should be that the changes are well adapted into the existing environment.

Indian Register of Shipping will be able to both assess monitoring plans and verify carbon emission reports under EU MRV, for any ship anywhere in the world, regardless of country of ownership, flag state, or class. IRS has established its own digital reporting platform that allows direct submissions of emissions report.

Source: Vijay Arora, Joint Managing Director of IRClass

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