Reducing emissions from the shipping sector

The MRV Shipping Regulation applies to ships above 5000 GT, in respect of their CO emissions released during their voyages from/to EEA ports (see below section on geographical scope) carried out after 1^st January 2018.

Ships are subject to the MRV Regulation regardless of their flag. A limited number of categories of ships are excluded, including: warships, naval auxiliaries, fish-catching or fish-processing ships, ships not propelled by mechanical means, and government ships used for non-commercial purposes.

The MRV Shipping Regulation sets monitoring and reporting obligations for EEA- related voyages (see section on geographical scope below) carried out after 1st January 2018.

Ship's activities

1. originating or terminating in a port of call and
2. serving the purpose of transporting passengers and cargo for commercial purposes

are defined as voyages.

Ballast voyages, from the last port of call where the ships has discharged cargo or disembarked passengers to the next port of call where cargo is loaded or passengers embark, also serve the purpose of transporting cargo and are therefore subject to the Regulation.

On the other hand, ships' movements that do not serve the purpose of transporting cargo or passengers for commercial purposes are not subject to the monitoring, reporting and verification requirements, for example;

1. extraction and subsequent carriage of dredged material,
2. ice-breaking activities,
3. carrying, laying, and repairing of cables/pipelines for underwater for telecommunications, electric power transmission, or other purposes;
4. providing support to offshore installations, such as drilling rigs‎, natural gas and oil platforms, offshore wind farms, and including in particular:
   1. carriage and positioning of anchors for drilling rigs,
   2. providing towage, salvage or other marine assistance/services to offshore installations,
   3. carriage of supplies and equipment to/ from offshore installations and ships;
   4. safety or rescue services provided to offshore installations,
   5. diving support,
   6. storing oil or gas without processing it,
   7. installation and decommissioning of subsea structures and offshore installations.

Ports of call are relevant as ending points / starting points of voyages. These are ports where a ship stops to load or unload cargo, or to embark or disembark passengers.

Stops in ports which do not fulfil these conditions are not ports of call, for instance if a ship stops in a port for the sole purpose of refuelling, obtaining supplies, relieving the crew, going into dry-dock or making repairs to the ship and/or its equipment.

Also stops in ports due to the ship being in need of assistance, or in distress or for the sole purpose of taking shelter from adverse weather or rendered necessary by search and rescue activities are not considered ports of call.

"Ship to ship" transfers carried out outside ports are covered by the Regulation as part of a voyage calculated from the last port of call to the next port of call. Variations of cargo arising from "ship to ship transfers" outside ports during a voyage should be taken into account. In those cases a weighted average for cargo carried should be calculated and applied to the entire voyage.

CO₂ emissions occurred within EEA ports of call are covered and are to be reported annually as an aggregated annual figure and a separate item under the emissions report. Cargo and other related parameters such as "distance travelled" or "cargo carried" are not to be monitored and reported while ships are just moving within ports of call between two voyages.

The expression "ports of call under the jurisdiction of a Member State" refers to ports of call located on "EU territory", (in other words, to which EU law fully applies). Not all ports belonging to an EU Member State are EU territories (see list below). For a voyage to be covered by the MRV Regulation at least one of the ports of call shall be located in a EU territory. Ports of call in the nine EU outermost regions (Açores, Madeira, Canarias, Guadeloupe, French Guyana, Martinique, Mayotte, Saint Martin and Reunion), and also ports of call in Norway (except those on Svarbald) and Iceland qualify as EU ports of call.

In practical terms, it implies that:

• voyages between a port of call located on the territories above and another port of call qualifying as EU port of call constitute "incoming"/ "outgoing" voyages and are to be monitored and later reported;
• voyages between two ports of call located on the territories above do not  fall under the MRV Shipping Regulation.

The process for incorporating the MRV Shipping Regulation into the European Economic Area Agreement (EEA Agreement) has been launched and will be finalised by mid-2017. It implies that the monitoring, reporting and verification requirements will cover from 1^st January 2018 the following:

1. voyages from a last port of call outside the European Economic Area (EEA) to a port of call situated in Norway or Iceland (EEA EFTA incoming voyages),
2. voyages from a port of call located in Norway or Iceland to their next port of call outside the EEA (EEA EFTA outgoing voyages),
3. voyages between two ports of call in Norway and/ or in Iceland (intra EEA EFTA voyages) and,
4. emissions within Norvegian and Icelandic ports of call.

MRV obligations are to be fulfilled on a "per ship" basis. The company fulfilling the MRV obligations is called the "MRV company".

The MRV company can be either the shipowner or any other organisation or person, such as the manager or the bareboat charterer, which has assumed the responsibility for the operation of the ship from the shipowner. The MRV companies need to submit a monitoring plan for each of the ships operating under their responsibility to an accredited verifier.

The MRV Shipping Regulation allows the parties involved in the operation of each ship subject to the Regulation to determine, who assumes the MRV monitoring and reporting obligations. From a practical point of view, and if necessary, a relevant clause could be inserted in the charter party (C/P) so as to clarify who is doing what in relation to the MRV Shipping Regulation. In this context, the company mentioned in the SOLAS Safety Management Code could be responsible for MRV requirements.

Changes of MRV company are to be properly reflected in the monitoring plan.

According to the MRV Shipping Regulation, MRV companies shall, for each of their ships carrying out voyages related to "EEA ports" after 1^st January 2018, fulfil the following monitoring and reporting obligations:

• By 31^st August 2017, MRV companies shall submit a monitoring plan to a MRV accredited verifier. It consists of transparent and complete documentation of the monitoring method and procedures to be applied to each of their ships.
• From 1^st January 2018 (1^st reporting period under the MRV shipping Regulation) MRV companies shall, on the basis of the ship's satisfactorily assessed monitoring plan, monitor the ships CO₂ emissions, fuel consumption and other relevant information with a view to aggregate data into an annual emissions report.
• From 2019, by 30^th April of each year, the MRV company responsible for the ship on 31^st December of the reporting period submits a satisfactorily verified emissions report to the Commission using a dedicated Union information system (also called THETIS MRV database (still under development). In parallel, MRV verifiers are to indicate that the Emission report has been considered satisfactory so the conditions for issuing a Document of Compliance have been fulfilled.
• From 2019, by 30^th June of each year, ships having carried out activities falling under the MRV Regulation during the precedent calendar year (reporting period X) shall carry on board a valid MRV Document of Compliance, issued in accordance with the THETIS MRV database, when calling at EEA ports.

For ships which call into EEA ports for the first time after the deadline for submitting monitoring plans (set on 31^st August 2017), MRV companies should submit a monitoring plan to an accredited verifier without delay, and no later than two months after the ship's first call at an EEA port.

A ship which has not carried out any EEA-related voyages during a whole reporting period (calendar year X) will not be required by Member States' authorities to have a Document of Compliance on board showing compliance for that specific reporting period (year X), when calling at EEA ports between 30^th June of year X+1 and 29^th June of year X+2.

The monitoring plan reflects the technical specifications and the monitoring methods to be applied to the voyages carried out by the ship concerned and which fall under the Regulation. It is prepared by the company having assumed the MRV responsibilities for this specific ship.

To avoid redundant submission of information, MRV companies can identify when sub-mitting information to an accredited verifier; :

• the information which applies in an identical manner to their entire fleet ('company-specific parts');
• the information whih reflects the ship's technical characteristics and specific procedures (ship specific parts).

There are no specific legal requirements regarding the way MRV companies are to submit monitoring plans to accredited verifiers, so it is up to the parties to agree on these issues bilaterally.

Monitoring plans can be established in any language agreed between the MRV company and the accredited verifier. However there is an obligation to ensure that an English translation of the satisfactorily assessed monitoring plan is available.

MRV companies shall prepare monitoring plans using a template corresponding to the model in Annex I of the Implementing Regulation (EU) 2016/1927. Information concerning all mandatory items, as identified in the monitoring plan model, has to be included, regardless of the way this information is structured. Companies can decide how to  organise the information to reflect their monitoring systems and procedures.

Additionally, a number of voluntary fields that might be relevant for limited number of ship categories, are identified in the monitoring plan model in Annex I to Regulation 2016/1927. These voluntary fields concern for example:

• the ice class of the ship and procedures, responsibilities, formulae and data sources for determining and recording the distance travelled and the time spent at sea when navigating through ice, if applicable and
• other procedures relevant to monitoring of fuel consumed and CO₂ emitted such as the procedures for determining and recording the fuel consumption for dynamic positioning, or the average density of cargo transported.

Information on procedures and other elements included under the voluntary fields on the monitoring plan is also part of the assessment by the verifier.

A MRV company is exempt from the obligation to monitor a specified ship on a "per-voyage basis", if according to schedule:

1. all of the ship's voyages during the reporting period are EEA-related voyages and
2. the ship performs more than 300 voyages during the reporting period.

Both conditions need to be fulfilled at the beginning of the reporting period.

In practical terms, it implies that providing data to the verifier on 'per voyage' monitoring is not compulsory to the extent that other documents and data (such as BDNs) could be used to calculate the ship's aggregated data.

MRV companies have to document their procedures to calculate aggregated data in the monitoring plan according to the table C.1 of the template in Annex I to Implementing Regulation 2016/1927.

National Accreditation Bodies (NABs) pursuant to Commission Regulation (EC) 765/2008 are the sole competent bodies in EEA Member States granting accreditation to legal entities performing verification activities pursuant to the MRV Shipping Regulation.

As a general rule legal entities established in the EEA shall request accreditation from the national accreditation body of the Member State in which they are established, or from the national body to which that Member State has had recourse. Only under exceptional circumstances that are identified under Regulation 765/2008, can an EEA legal entity request accreditation by a different NAB.

Non-EU legal entities have a choice to introduce a request in any of the European national accreditation bodies providing for accreditation for MRV shipping activities.

A list of NABs providing accreditation for MRV shipping verification activities together with access to the different NABs' list of accredited verifiers as provided in their web page.

As part of the accreditation process, the competent NAB carries out an assessment of whether all the requirements in Delegated Regulation EU 2016/2072 on verification and accreditation pursuant to the MRV shipping Regulation and in EN/ISO 14065 have been met. The assessment process will include a review of the relevant documents, office visit (s) and one or more witness audits of the performance and competence of the verifier's staff. As a result an accreditation certificate will be issued to the legal entity.

There might be differences in the process carried out by each NAB so please refer to the competent NAB as soon as possible so as to prepare for a timely start of the accreditation process. Also planning of the accreditation process has to be agreed upon between the legal entity seeking accreditation and the competent NAB.

National accreditation bodies (NABs) are to set up and manage a public database which includes information on at least:

• the name, accreditation number and address of each verifier accredited by that NAB;
• the date on which the accreditation or certification was granted and its expiry date; and
• information on administrative measures that have been imposed upon the verifier.

MRV companies will be able to select any duly accredited verifier irrespective of the ship's flag or the place where the MRV company is based and where the accredited verifier is based.

An accredited verifier can perform verification activities for any ship falling under the MRV Shipping Regulation, irrespective of where the MRV company is based, of where the ship is registered and of where the verifier itself is based. However, verification activities for a MRV company in respect of which the verifier has a conflict of interest or pose an unacceptable risk to their impartiality are not possible.

A verifier must be accredited by the time it issues its conclusions on monitoring plans or on emissions reports.