The European lawmakers face many dilemmas regarding a new emission scheme projected for the maritime sector. Among them is the decision whether to create a closed system of maritime emission allowances, resembling the architecture adopted for aviation (where the allowances authorized to be surrendered are only new allowances created for the separate, maritime or aviation, sector), or to consider an open design.
Another key choice, burdened with severe economic consequences, poses the question whether to grant allowances for free or to auction.
Building on not-so-successful experiences with the aviation sector in the EU ETS (where definitely the stop-the-clock action had to be done) the stepwise approach is currently considered to measure and reduce GHG emissions from ships.
The strategy set out by the European lawmakers (See European Commission's documentation on reducing emissions from maritime transport) consists of three consecutive steps:
- the system of monitoring, reporting and verification of emissions (MRV) proposed in June 2013;
- the setting of reduction targets for the maritime transport sector;
- the application of further measures, including market-based measures (MBMs), in the medium to long term.
The current step undertaken, requires from 1 January 2018, CO2 emissions and fuel efficiency be monitored for:
- all intra-EU Union voyages (ie those between ports under the jurisdiction of an EU Member State);
- all incoming voyages from the last non-EU port to the first EU port of call;
- all outgoing voyages from an EU port to the next non-EU port of call.
It is proposed that the rules apply from 1 January 2018.
When it comes to the scope of the scheme the European Commission's proposal aims to create an EU-wide legal framework for collecting and publishing verified annual data on CO2 emissions from all large ships (over 5 000 gross tons) that use EU ports, irrespective of where the ships are registered (small emitters (ships below 5000 GT) which represent about 40% of the fleet, but only 10% of the total emissions are proposed to be excluded).
At this stage, the proposed MRV system will be implemented for CO2 emissions only. The lawmakers consider to be appropriate to review this scope at later stage.
Assignment of tasks
It is proposed to assign a limited number of tasks to the Commission which shall be assisted by the European Maritime Safety Agency (EMSA).
Tasks related to the check of monitoring plans, emission reports, communication with ship owners and operators and the issuance of documents of compliance would be ensured by accredited third party verifiers. Such bodies which may include recognised bodies already have extensive experience and play an important role for maritime safety. Enforcement of the MRV obligations would be ensured by Member States, more concretely by Port State Authorities making use of the existing flag State and port State control mechanisms and of data published by the Commission. The monitoring and reporting obligations will apply by calendar year.
Annual emissions and other relevant information from shipping activities will need to be collected from 2018 onwards. This will be done according to the methodology agreed in each ship's monitoring plan. The data will then need to be verified by an accredited verifier and reported to the Commission and to the ship's flag State.
Verified emission reports for shipping activities in 2018 covered by the EU Regulation are to be submitted by 30 April 2019.
By 30 June of each year, starting in 2019, ships covered by the Regulation will have to carry on board a valid document confirming compliance in the previous year with the monitoring and reporting obligations. Flag state and Port State authorities will check ships' compliance through inspections.
Ship owners can choose from a list of four monitoring methods. Depending on their choice, monitoring could be entirely based on documents and data which are already carried on all ships today, such as bunker fuel delivery notes.
After being monitored, this data will need to be independently verified and then reported to the Commission and the ship's flag state.
Emissions from vessels within ports will also need to be monitored, reported and verified. This is intended to encourage the use of available shore-based emission-reduction technologies.
It is envisioned that templates to simplify the preparation of monitoring plans, reporting and verification of emissions and other climate relevant information will be provided and adopted by the European Commission based on implementing acts.
FAQ on monitoring emissions from ships
Certain frequently asked questions has already been published by the European Commission. Some of them are:
Are non-EU ships also covered? What about small ships?
The Regulation will cover all types of ships above 5000 gross tons with the exception of the following categories, which are fully exempted: warships, naval ships, ships for catching or processing fish, ships not propelled by mechanical means, yachts and government ships for non-commercial purposes.
Based on the principles of non-discrimination and flag neutrality, the Regulation will apply to any such ship calling at any EU port, irrespective of where it is registered.
The 5000 gross ton threshold means that only large ships emitting significant levels of emissions will be covered. The threshold has been selected after a careful and objective analysis aimed at avoiding administrative burdens on small and medium-sized ships which do not produce significant emissions. The Commission estimates that the MRV requirements will apply to 90% of the CO2 emissions arising from voyages to, from and between EU ports, and to around 55% of ships calling at EU ports.
What types of data will be collected?
The primary objective is to collect data on CO2 emissions, which will help raise the sector's awareness of its contribution to climate change. Accordingly, the amount and type of fuel consumed by ships on routes covered by the Regulation are the core data to be collected.
Ship owners will also have to provide information on distance travelled, cargo carried and time spent at sea, in particular to obtain a general overview of ships' average energy efficiency. This will facilitate the alignment of the EU regulation with the on-going IMO discussions, which focus on enhancing the energy efficiency of the sector.
The proposed MRV system will not cover other GHGs besides CO2 nor air pollutants since measuring equipment for these is currently not sufficiently reliable. However the scope could be expanded at a later stage, in order to clarify and simplify monitoring and reporting requirements.
What if IMO adopts a global framework for maritime emissions?
The likely timeline for the Regulation's adoption leaves ample opportunity for the IMO to make progress before the EU rules come into force. Moreover, in the draft Regulation the Commission specifically states its intention to propose amendments to take into account progress towards an international agreement on global measures to reduce GHG emissions from maritime transport.