EC seeks ship CO2 monitoring and reporting requirement

EU HQ flagsJUNE 28, 2013 —  Get used to the abbreviation "MRV." It means "monitoring, reporting and verification" and the European Commission today proposed a regulation which would establish an EU-wide system for the monitoring, reporting and verification (MRV) of carbon dioxide (CO2) emissions that will require owners of ships of 5,000 grt and up using EU ports to monitor and report the ships' annual CO2 emissions.

The draft Regulation requires approval by the European Parliament and Council to become law.

Connie Hedegaard, EU Commissioner for Climate Action, said: "Today we are charting a clear course towards reducing maritime greenhouse gas emissions. The EU monitoring system will bring environmental and economic gains for the shipping sector by increasing transparency about emissions and creating an incentive for ship-owners to cut them. This initiative is fully in line with the latest proposals on global fuel efficiency standards and market-based measures being discussed in the International Maritime Organization. Robust monitoring, reporting and verification of emissions is an essential precondition for informed discussions in Europe and worldwide on reduction targets for the sector."

Siim Kallas, Commission Vice-President, responsible for mobility and transport, said: "We recognize that shipping must contribute to efforts to reduce greenhouse gas emissions, preferably through global measures which are the most environmentally effective and make economic sense. For a global sector such as maritime transport, this can best be achieved through the International Maritime Organization. On the basis of today's policy outline, the EU will continue its efforts, jointly with its global partners, to achieve a comprehensive international solution. Today's proposal is a significant contribution to IMO efforts to cut fuel use and increase the fuel efficiency of ships with a range of instruments including technical and market-based measures."

The proposal will 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.

Shipowners will have to monitor and report the verified amount of CO2 emitted by their large ships on voyages to, from and between EU ports. Owners will also be required to provide certain other information, such as data to determine the ships' energy efficiency.

A document of compliance issued by an independent verifier will have to be carried on board ships and will be subject to inspection by Member State authorities.

The EC says that the European system is intended as a building block for a global system. The proposed rules are designed to support a staged approach towards setting global energy efficiency standards for existing ships, as proposed by the United States and supported by other members of the International Maritime Organization. The EU rules would be adapted to the global standards if and when a global system is set up.

Administrative burden minimized

The Commission's proposal aims to minimize the administrative burden on companies by basing the rules on existing documents and equipment carried on board ships. Companies will be able to select their preferred monitoring methodology.

Reduced emissions and costs

The EU-wide system of monitoring, reporting and verification (MRV) proposed is expected to cut CO2 emissions from the journeys covered by up to 2 percent compared with a "business as usual" situation, according to the Commission's impact assessment. The system would also reduce net costs to owners by up to €1.2 billion per year in 2030.

In addition, says the EC, it will provide useful insights into the performance of individual ships, their associated operational costs and potential resale value. This will benefit ship owners, who will be better equipped to take decisions on major investments and to obtain the corresponding finance.

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