The inside track on MRV regulation

Greenhouse Gas (GHG) emissions from shipping have increased sharply, to 949 million metric tonnes of GHG emissions in 2012, or 2.7% of global GHG emissions, up from 1.8% in 1996. By 2050, the IMO projects that GHG emissions from shipping will rise by 50–250%. To derive a baseline from which to abate this projected rise, the European Union (EU) has introduced a monitoring, reporting and verification (MRV) system that will apply to all ships over 5,000 gross tonnes from 2018; requiring vessel operators to monitor and report fuel consumption, emissions and transport work on all voyages to, from and between EU ports. CEO of leading verification specialist, Verifavia, Julien Dufour gives us the inside track.

What’s the background?

In June 2013, the European Commission (EC) proposed a strategy for progressively integrating maritime emissions into the EU’s policy for reducing its domestic GHG emissions. After a two-year legislative process involving all EU institutions, this strategy was adopted by the European Parliament in April 2015. The Regulation 2015/757 – ‘Shipping Monitoring, Reporting and Verification (MRV) Regulation’ – came into force on 1 July 2015.

What does MRV regulation hope to achieve?

According to the EC’s impact assessment, the MRV system is expected to cut GHG emissions from the journeys covered by up to 2%, compared with a ‘business as usual’ situation. The system should also reduce net costs to owners by up to €1.2 billion per year in 2030.

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

How will it work?

The strategy consists of three consecutive steps:

1. Monitoring, reporting and verification of carbon emissions from ships

2. GHG reduction targets for the maritime transport sector

3. Further measures, including Market-Based Measures (MBM)

The first step of the strategy is the design of a robust MRV system of carbon emissions for ships exceeding 5,000 gross tonnage (GT) on all voyages to, from and between EU ports applicable from 2018. These vessels will have to submit a monitoring plan to a verifier such as Verifavia for approval, indicating the methodologies chosen to monitor and report emissions and other relevant information.

Which fuel consumption methodologies are acceptable?

There are four acceptable fuel consumption monitoring methodologies:

1. Bunker Fuel Delivery Note (BDN) and periodic stock-takes of fuel tanks

2. Bunker fuel tank monitoring on board

3. Flow meters for applicable combustion processes

4. Direct emissions measurements

Ships can use a combination of these methodologies if it results in an improvement in the accuracy of monitoring.

But shipping is global – what about the rest of the world?

The EU Shipping MRV system is designed to contribute to building an international system. First steps in this direction have already been taken at the IMO, with active support from the EU and partner countries. By unearthing further insights into the sector’s potential to reduce emissions, the EU Shipping MRV system should also provide new opportunities to agree on efficiency standards for existing ships.

But there are still so many unanswered questions relating to reporting and compliance.

Although Shipping MRV came into force on 1 July 2015, there is still much work to be done to ensure a harmonised, viable and cost-effective approach.

Dialogue between the shipping industry and the regulators will continue through both formal and informal channels. For example, the EC has assembled a Shipping MRV subgroup of experts on verification and accreditation, of which Verifavia is a member. The first meeting was held in Brussels at the beginning of this month, exploring the opinions of relevant industry stakeholders including industry associations, shipping companies, regulatory authorities, consultants, verifiers and NGOs for example. The output will feed into the preparatory work for the drafting of the detailed technical acts on monitoring, reporting, verification and accreditation of verifiers.

In addition, discussion will continue also through less formal channels, whether this is through the maritime media, at industry events or simply over lunch or coffee. As ever, impactful communication is central to arriving at regulation that is fair, effective and enforceable.

For more information about Verifavia, visit https://normecverifavia.com/

For up-to-date information and news about the MRV Regulation, follow https://x.com/NormecVerifavia