EU ETS and MRV Regulation: Implementing and Delegated Acts for Maritime Shipping

From October 2023, eight implementing and delegated acts are expected to be published, supporting the ETS Directive and MRV Regulation. These acts will impact shipowners by updating rules on GHG emissions monitoring, verification, and reporting, as well as introducing new regulations for company level data reporting and the administration of shipping companies.

MRV Delegated Acts

1. 'Rules and methods for monitoring GHG emissions (updating Annexes I & II of Regulation (EU) 2015/757 on the monitoring, reporting and verification of greenhouse gas emissions from maritime transport).'

2. 'Rules on verification and accreditation (updating delegated regulation (EU) 2016/2072 on the verification activities and accreditation of verifiers pursuant to Regulation (EU) 2015/757).'

3. 'Rules on the reporting of aggregated emissions data at company level.'

MRV Implementing Act

4. 'Implementing act templates for monitoring plans, emissions reports and reports at company level (updating Implementing Regulation (EU) 2016/1927).'

ETS Implementing Acts

5. 'Rules for the administration of shipping companies by administering authorities.'

6. 'List of shipping companies which perform a maritime service under ETS, with their attribution to responsible administering authorities.'

7. 'List of non-EU neighbouring container transhipment ports.'

8. 'List of islands and trans-national maritime routes under public national service contract or obligation subject to ETS derogations.'

This Class News outlines the key (updated) concepts in these acts and how they will impact shipowners. Note: at the time of publication, finalisation of these acts is pending, so the information is subject to change.

Rules and methods for monitoring GHG emissions (MRV Annexes I & II)

Section A, on calculation of GHG emissions: This covers carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) emissions, while considering both fuel combustion and slippage as required. Total GHG emissions is calculated as the sum of CO2, CH4 and N2O emissions expressed in CO2 equivalent. Companies may diverge from the default emissions factors listed, provided there is full consistency with the FuelEU Maritime Regulation (pending) requirements.

Section B, on methods for monitoring GHG emissions: It is understood that the four monitoring methods currently allowed under the MRV Regulation will remain unchanged in their base principles. A quality control provision on fuel measurements for methods A to C will be added, requiring companies to carry out regular cross-checks between bunkering quantity, as provided by the Bunker Delivery Note (BDN), and bunkering quantity, indicated by on-board measurements.

Section C, rules on data management and control: This will likely require companies to establish procedures for data flow and control activities, and to have the relevant descriptions of such procedures in the monitoring plan.

Annex II on 'Monitoring of other relevant information'A new Section C will be added, outlining the rules for the monitoring of aggregated emissions following the extension of the EU ETS Directive to maritime transport activities.

Rules on verification and accreditation

Strengthening the requirements for verifiers by aligning with the rules already applicable to the other ETS sectors. In relation to shipowners, this includes establishing requirements for physical site visits to be undertaken every four years, with the option for virtual site visits in between dependant on various criteria being met.

Rules on the reporting of aggregated emissions data at company level

To outline in which situations an Administering Authority (AA) can data mine at company level. For example, when no data has been submitted in a reporting year and the AA will have to estimate the allowance to be paid into the system.

Monitoring Plan and Emission Reporting

Amendments to Annex I and II in Implementing Regulation (EU) 2016/1927 are being developed to provide updated and new templates for:

The Monitoring PlanEmissions Reports Document of ComplianceCompany Emission Reports (new)Companies and verifiers will have to use the THETIS-MRV system to upload and access information.

Rules for the administration of shipping companies by administering authorities

The Assignment of Administering Authorities For EEA registered ships, the IMO Unique Company and Registered Owner Identification Number Scheme will be used to determine the country in which a shipping company is registered and subsequently the AA.

For non-EEA registered shipping companies, information on historical port calls from voyages to the EEA will be used from the existing 'SafeSeaNet' database and/or Automatic Identification System (AIS) data (as available). The country with the most port calls during the preceding four monitoring years will be assigned as the AA.

What happens to the assignment of AA in the case of company mergers or splitsResponsibility for ETS compliance – noting under the EU ETS Directive, the entity responsible for compliance can be either:(i) The shipowner; or (ii) Any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner.

At the time of publication of this Class News, there is still ongoing discussion to clarify the interpretation of this statement and to clarify who will have ultimate responsibility for ETS compliance.