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Gearing up for the first EU MRV legal deadline

21/02/2017
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It is estimated that more than 12,000 vessels will be affected by the regulation 2015/757 (‘Shipping MRV Regulation’), requiring shipowners and operators to prepare and submit a monitoring plan which outlines fuel consumption, carbon emissions and transport work. Julien Dufour, CEO of Verifavia Shipping, an independent carbon emissions verification body for aviation and maritime transport, outlines the key consideration of a verifier and how owners and operators can comply.

 
Ambitions to reduce emissions


As the world shifts to a low carbon economy, the shipping industry is under increasing scrutiny to play its part in reducing carbon (CO2) emissions. The attention is warranted. According to the Third IMO GHG Study 2014, “International shipping accounts for approximately 2.2% and 2.1% of global CO2 and GHG emissions on a CO2 equivalent (CO2e) basis, respectively”.

In addition, is estimated that ships of 5,000gt and above account for approximately 85% of the industry’s CO2 emissions. With clear ambitions to reduce greenhouse gas (GHG) emissions from ships, the EU has mandated processes for vessels of this size and above to achieve their goals.

After a two-year legislative process involving all EU institutions, the European Commission’s (EC) proposed strategy for progressively integrating maritime emissions into the EU’S wider policy to reduce its domestic GHG emissions was adopted by the European Parliament. And on July 1st 2015, regulation 2015/757 (‘Shipping MRV Regulation’) came into force.

According to the regulation, shipowners and operators must prepare and submit a monitoring plan (MP), outlining the procedures in place to monitor and report their fuel consumption, carbon emissions, and transport work completed by each vessel in their fleet by August 31st 2017. The MP must then be successfully assessed by an accredited verifier by December 31st 2017, before the start of the first monitoring period.

Verifavia Shipping is on course to be among the first fully accredited global verifiers, having declined the option of merely achieving short-term MP Assessor status, and will be in a position to provide advice and guidance all matters relating to EU MRV verification.


Owners have to act now


With just seven months until the first legal deadline, shipowners and operators of vessels sailing in the European Union (EU) and exceeding 5,000gt must act now to ensure they are MRV-ready, and that their vessels are compliant.

Companies choosing to act now will be in a stronger position to take timely corrective action and avoid the potential verification bottleneck that may ensue. Moreover, this will be the first time that owners and operators are expected to prepare an MP that adheres to the strict guidelines documented within the regulation.

As with any new complex process or regulation, it makes sense to start upon the road to compliance as soon as possible, ensuring sufficient opportunity to identify and close the gaps. With the MP template and Delegated and Implementing Acts now finalised, owners and operators are equipped with a good reference point when starting to develop their MPs.

To comply with MRV requirements, shipowners must consider the type of data they need to submit, the mechanics of how it can be collected on the ship, and the type of IT system to be used. In addition, they must also consider how data will be stored, transferred, extracted, controlled and checked, as well as how the calculations will be made and ultimately how the report will be compiled.

These are all key considerations that the verifier will check when conducting an MRV GAP analysis to ensure that the processes, procedures and methodology described for collecting and reporting emissions and other data comply with the regulations.

A key concern has been the costs relating to EU MRV compliance, particularly in today’s challenging market conditions. However, the cost of complying will vary from one shipping company to another, depending on their individual and specific needs.

For example, additional costs may be incurred if a shipping company decides to use a consulting company to develop its MP or prepare the emissions report.

 There may also be a need to purchase a dedicated EU MRV IT system to facilitate the collection of data and automate the generation of the emissions report. In addition, some shipping companies may have to develop in-house tools to allow the collection of the required data. The cost of verification is not expected to be that high but will largely depend on the size of fleet and the associated economies of scale.

SHIP&OFFSHORE

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