EU MRV and IMO DCS – what does the proposed alignment mean?

With the introduction of the Monitoring Reporting and Verification (MRV) and Data Collection System (DCS), both the European Union (EU) and the International Maritime Organisation (IMO) have clear ambitions to reduce GHG emissions from ships, and have mandated processes to achieve their goals. Although there are some similarities between the two systems, the more recently outlined IMO approach to monitoring, reporting and verifying carbon emissions (CO2) has some significant differences to the EU MRV legislation.

The EU MRV system was always designed to contribute to building an international system, and calls for alignment have been voiced since the IMO DCS was initiated in 2016. In February this year, three years on, the European Commission published its proposal for partial alignment of the two regulations and a public consultation launched inviting feedback until 1stApril 2019The objective of this proposal is to facilitate the harmonious implementation of the two MRV systems, while preserving the aims of the EU MRV; to keep the collection of robust and verified CO2 emissions data at individual ship level to stimulate the up-take of energy efficiency solutions and inform future policy making decisions.

To achieve this, the proposal calls for a streamlining of the two systems (EU MRV and IMO DCS) in terms of definitions, monitoring parameters, monitoring plans and templates to reduce administrative burdens, but not to modify the governance, scope, verification, transparency and CO2 reporting requirements.

In short, the text proposes to:

• Amend the definition of ‘Company’ so that it is consistent with the IMO DCS definition (ISM manager)

• Amend the definition of a 'reporting period' so that it is consistent with the definition in the IMO DCS. A 'reporting period' would mean the period from 1 January until 31 December inclusive. For voyages starting and ending in two different calendar years, the respective data would now be accounted under the calendar year concerned (similar to the IMO DCS)

• Cargo carried would now be reportable on a voluntary basis

• The deadweight tonnage would now be required to be reported in lieu of the actual cargo carried

• The template of the monitoring plan would be slightly simplified

• Time at sea would be replaced by hours underway (same as in the IMO DCS)

• Finally, and most importantly, where there is a change of ‘Company’, the previous and the new companies would now be responsible for EU MRV only for the period corresponding to the activities carried out under their respective responsibilities (same as in the IMO DCS)

While the first two amendments listed above would help to ensure that the same legal entities monitor and report according to similarly calculated reporting periods, what remains unchanged is the reporting procedure. EU MRV requires reporting to the European Commission through THETIS-MRV and IMO DCS to the Flag State.

The EU MRV data – either aggregated or on a per voyage basis – must be uploaded into THETIS-MRV until April 2019 by the shipping company to ensure compliance with the EU MRV Regulation. The uploaded data must then be validated by the verifier, before being submitted online by the shipping company to the European Commission and the respective Flag administration. While a specific XML format has been defined for import into THETIS-MRV, neither the EU MRV or IMO DCS regulation requires data to be submitted to verifiers in a certain format; if the content is complete and compliant with the requirements of the regulations, it can be submitted in any format – from simple spreadsheets (i.e. xlsx, .csv, etc.) to advanced markup language format (i.e. xml, etc.), or more complex formats used in IT systems for monitoring vessel performance. The verifier can then extract the data as necessary to proceed with the verification process. This gives the shipowner / operator total flexibility and places the onus on the verifier to perform its role.

The final point listed above is perhaps most significant, as previously under EU MRV, if a vessel changed ownership, the new owner would be responsible for the whole the reporting period. For example, if you purchased a ship on the 1stJune, you would be responsible for the vessel data from 1stJanuary and would need to appropriate data from the previous vessel owner. This represented a significant challenge, which may now be eliminated under the proposed alignment, with the new owner only responsible for data from purchase date of the vessel.

One key requirement of the EU MRV that remains intact is the reporting of data ‘per voyage’. A reportable voyage is a voyage that involves at least one EU port of call, which is a port where a ship stops to load or unload cargo, or to embark or disembark passengers. A ‘voyage’ is a trip between two ports of call. It is important to note that stops for the sole purpose of bunkering, crew changes or maintenance, etc. are not considered to be a ‘port of call’. Consequently, all stops and voyages, as well as the purpose of the stops must be appropriately recorded so that reportable voyages can be correctly identified and monitored.

If agreed, the updated Regulation will apply from 1 January following the year of entry into force, which means from 2020 if it comes into force in 2019.The proposed alignment is expected to preserve the benefits of the EU MRV in terms of environmental, social and economic impacts while at the same time increasing efficiencies and reducing the administrative burden for companies that have to comply with both schemes. Overall, it represents a welcome step towards simplification, enabling shipping companies to monitor data in the same way for both emissions reduction schemes.

Julien Dufour, CEO, Verifavia Shipping