Industry Insight: Emissions Data Collection – IMO vs. EU

Julien Dufour, CEO, Verifavia Shipping.

It is estimated that ships of 5,000 gross tonnage (GT) and above account for approximately 85% of CO2 emissions from international shipping. Both the EU and the IMO have clear ambitions to reduce greenhouse gas (GHG) emissions from ships, and have mandated processes for vessels of this size and above to achieve their goals. Although there are some similarities between the two systems, the more recently outlined International Maritime Organisation (IMO) approach to monitoring, reporting and verifying carbon emissions (CO2) has some significant differences to the European Union's (EU) Monitoring, Reporting and Verification (MRV) legislation. Julien Dufour, CEO, Verifavia Shipping, compares and contrasts the two systems.

Shipping emissions are predicted to increase between 50 and 250 per cent by 2050, depending on future economic and energy developments. Particularly in the wake of the Paris Agreement, this rate of growth must be stalled if global targets of keeping global warming to below 2 degrees are to be achieved. The international shipping community recognises that it must assume its "fair share" of efforts to curb GHG emissions and there are currently two different mandated approaches to achieve this.

After a two-year legislative process involving all EU institutions, Regulation 2015/757 ('Shipping MRV Regulation') came into force on 1 July 2015. In April 2015, the Marine Environment Protection Committee (MEPC) of the IMO agreed mandatory requirements for ships to record and report data on their fuel consumption. At the 70th meeting in October 2016, it was decided to adopt those requirements as modifications to MARPOL Annex VI.

The EU MRV system was designed to contribute to building an international system and calls for alignment continue to be voiced. However, although the industry is concerned about the 'naming and shaming' of companies and does not want two different systems, many believe that the IMO system is less transparent and not as accurate as the European one. This means that as it stands, for those vessels calling at EU ports during 2019 and beyond, both regulations will have to be complied with.

Even if some harmonisation between the two systems is initiated in the future, the two systems will certainly run in parallel for at least the next few years.

The table below sets out the core components of the two systems alongside each other for ease of comparison. The key differences of note include:

• The EU MRV regulation requires reporting of actual cargo carried onboard, fuel consumed, and CO2 emitted, whereas the IMO only requires reporting of fuel consumed
• For EU MRV, calculations are made by the shipping companies and verified by an accredited verifier. For IMO, the calculations are verified by the administration, according to national procedures
• The EU plans to make this information publicly available whereas, for IMO, the raw data will only be available to IMO and flag states who will then share aggregated anonymised data.

According to the EU MRV regulation, shipping companies with vessels exceeding 5,000 gross tonnage (GT) and calling at an EU port on or after January 1st 2018 for commercial purposes must report fuel consumption and carbon emissions on all voyages, as well as consumption while at berth.

Additional required information includes distance travelled, time spent at sea, mass of the cargo carried, transport work and average energy efficiency – expressed in fuel consumption or carbon emissions per distance or per transport work.

The IMO has adopted a global approach which enters into force on 1st March 2018, with the first reporting period for the 2019 calendar year. The data required includes the fuel consumption data (by fuel type and in metric tonnes), as well as distance travelled and time at sea, from berth to berth.

Aggregated data must be reported to a ship's flag state after the end of each calendar year, which will need to verify that the data has been reported in accordance with the Annex VI requirements before issuing a Statement of Compliance to the ship. Administrations will then submit aggregated data to the IMO Ship Fuel Oil Consumption Database for anonymised publication.

The first legal deadline of 31st August 2017 is just eight months away. The Monitoring Plan required by MRV regulation must specify which of the four allowable emissions monitoring methodologies the shipping company intends to use, as well as how transport work will be calculated. It must be submitted to the verification body by 31st August 2017 and successfully assessed by 31st December 2017, before the start of the first monitoring period. Now is the time to start examining obligations for vessels, as well as shore systems and routines, so that gaps can be identified and addressed to enable timely and effective compliance.