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1.6.3 Monitoring, Reporting and Verification of CO2 Emissions

The IMO work on Market Based Measures (MBMs, see also Chap. 8 of this book) was suspended in May 2013 in the wake of a clash between developed and developing Member States at MEPC 65. One month later the European Commission issued its proposal for a Regulation on monitoring, reporting and verification of CO2 emissions, the so-called MRV proposal, as a first step towards setting GHG reduction targets and taking further measures, including an MBM (EC, 2013c).

The immediate objective of the MRV proposal is to produce accurate information on the CO2 emissions of large ships using EU ports and incentivize energy efficiency improvements by making this information publicly available. In this way, the Commission sets the ground for possible future MBMs or efficiency standards, while at the same time attempts to address one of the market barriers found to prevent the implementation of cost-effective abatement measures by the industry, namely the lack of reliable information on fuel efficiency of ships.[1] Yet, another stated objective of introducing an MRV system is the securing of more time to discuss emission reduction targets and relevant measures, particularly at global level in IMO.

The proposed MRV system applies to ships above 5,000 GRT, regardless of flag, and covers intra-EU, incoming (from the last non-EU port to the first EU port of call) and outgoing (from an EU port to the next non-EU port of call) voyages. It concerns the CO2 emissions only.

Following the preparation of an emission monitoring plan by the ship-owning

company and its approval by an accredited verifier, information on fuel consumption, distance travelled, time at sea and cargo carried is collected by the company for each ship and each journey falling under the Regulation. Actual fuel consumption for each voyage can be calculated using one of the following methods, provided that the method selected is pre-defined in the monitoring plan and, once chosen, is applied consistently:

• Bunker Fuel Delivery Notes and periodic stocktakes of fuel tanks,

• Bunker fuel tank monitoring on board,

• Flow meters and applicable combustion processes, and

• Direct emissions measurements.

Based on these parameters, a number of energy efficiency/emissions indicators are calculated and reported on an annual basis. The annual reports are submitted to the Commission and the flag state after their approval by the verifiers, who issue conformity documents that need to be kept on board the ships covered by the system. Conformity is to be checked by the flag state and through the port state control system. Sanctions are foreseen for the failure to comply, including in certain cases the expulsion of a ship, i.e. banning its entry to EU ports until the compliance problem has been resolved. The energy efficiency performance of the ships falling within the scope of the Regulation is made publicly available by the Commission every year.

As is usually the case, the proposal has attracted criticism from both directions. The environmental groups consider the proposal exceptionally mild, while the shipping interests argue that it imposes unnecessary obligations to an industry that suffers already from excessive administrative burdens (refer also to Sect. 8.6.2).

In November 2014, an informal agreement by the EU legislators on the MRV proposal was announced according to which, no major modifications on the final text should be expected. Both the European Community Shipowners Association (ECSA) and the International Chamber of Shipping (ICS) expressed their concern that with the MRV proposal, which is expected to be fully operational by 2018, the EU may pre-empt negotiations taking place at IMO. Furthermore, ICS drew attention to the need to handle data on cargo carried by ships with particular sensitivity because of the suspicion that this could lead to the development of a mandatory operational efficiency index, like the EEOI of Sect. 1.6.1, whose mandatory application for benchmarking different vessels was considered inappropriate by IMO on technical grounds (GreenPort, 2014).

  • [1] The other market barriers relate to: (a) the split incentives between ship owners who invest into efficiency improvements and ship operators who reap the benefits of such investments through lower fuel bills, and (b) the lack of access to finance for these investments
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