EU MRV vs. IMO fuel consumption data collection system

Julien Dufour, CEO, Verifavia Shipping compares and analyses similarities and differences of the EU MRV vs IMO scheme as per MEPC70 outcome and final EU legislation.

Overview

In June 2013, the European Commission (EC) proposed a strategy for progressively integrating maritime emissions into the EU’s policy for reducing its domestic greenhouse gas (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 MRV Regulation’) came into force on 1 July 2015.

Similarly, the International Maritime Organisation (IMO) also has a roadmap through to 2023 focused on developing a comprehensive strategy for the reduction of GHG emissions from ships. 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 70^th meeting in October 2016, it was decided to adopt those requirements as modifications to MARPOL Annex VI.

Both the EU and the 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.

EU MRV

According to the EU MRV regulation, shipping companies with vessels exceeding 5,000 gross tonnage (GT) operating in the EU have until August 2017 to prepare monitoring plans that describe the procedures they will use to monitor and report their carbon emissions and transport work. MRV regulation will see the EU collect and make publicly available data for over 12,000 vessels calling at EU ports on or after 1^st January 2018 to load or unload cargo, or embark or disembark passengers for commercial purposes.

Regardless of Flag or nationality, every vessel must monitor and record its fuel consumption and CO₂ emissions. The associated transport work must also be recorded, which is the commercial cargo transported, multiplied by the distance sailed. Ballast voyages must also be considered in the same way as laden voyages. Only certain vessels, such as warships, naval auxiliaries, and a number of very specialised ships are exempt.

The monitoring plan – scope and milestones

For every vessel that anticipates making a commercial call in an EU port in 2018, a monitoring plan (MP) must be developed. The content of this MP is specified in article 6 of the EU MRV Regulation and must include:

• Identification of ship and shipping company / ship owner
• Identification of emissions sources
• Description of procedures for monitoring voyages, fuel consumption, and activity data
• Methodology for data gaps
• Procedures for quality control
• Identification of responsibilities and ICT systems used

In particular, the MP must specify which of the four allowable emissions monitoring methodologies (Bunker Fuel Delivery Note (BDN) and periodic stock-takes of fuel tanks, bunker fuel tank monitoring on board, flow meters for applicable combustion processes, or direct emissions measurements) the shipping company intends to use, as well as how transport work will be calculated. It must be submitted to the verification body by 31^st August 2017 and successfully assessed by 31^st December 2017, before the start of the first monitoring period. The emissions and transport work data for 2018 must then be consolidated in an annual report, which must be verified by an independent accredited verifier by 30^th April 2019. Once this is done, the report must be submitted to the European Commission and the Flag State, and the vessel should carry onboard the document of compliance from June 2019.

Although the first legal deadline of 31^st August 2017 is eight months away, it is possible to start MRV preparation now, as most of the technical rules have already been agreed legally.

IMO fuel consumption data collection system

The IMO has adopted a global approach – a mandatory fuel consumption data collection system for international shipping, requiring ships of 5,000 GT and above to start collecting and reporting data to an IMO database from 2019. Adopted as an amendment to chapter 4 of MARPOL Annex VI, a new Regulation (22A) has been added on the collection and reporting of ship fuel oil consumption data. In addition, new appendices have been developed outlining ‘Information to be submitted to the IMO, including ‘Ship Fuel oil Consumption Database’ (Appendix IX), and ‘Form of Statement of Compliance – Fuel Oil Consumption Reporting’ (Appendix X). These amendments will enter into force on 1^st March 2018 and the first reporting period will be for the 2019 calendar year.

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 data to be submitted 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.

In addition, flag administrations, or other authorised organisations, will have to ensure that by 31 December 2018, the ship’s Ship Energy Efficiency Management Plan (SEEMP) onboard has been updated to document the methodologies that will be used for collecting the required data and reporting that data to the flag administration. Revisions to the SEEMP Guidelines have been adopted, which provide direction for developing the methodologies to be followed for collecting and reporting the data, as well as further clarifying the above mentioned data that needs to be collected. 


The mandatory data collection system is intended to be the start of a three-step process in which analysis of the data collected will provide the basis for an objective, transparent, and inclusive MEPC policy debate. This will then lead to a final agreement on targets and measures, including an implementation plan in 2023.

EU MRV and IMO fuel data systems compared

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.

What next?

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 and the international shipping community recognises that it must assume its “fair share” of efforts to curb GHG emissions. It is estimated that ships over 5,000 GT and above account for approximately 85% of CO₂ emissions from international shipping, which is why both IMO and EU systems concern vessels of that size.

The EU MRV system was designed to contribute to building an international system and calls for alignment continue to be voiced. At present, it is unclear if this will happen. However, what is clear is that – before launching any public consultation – the EC requires the guidelines from IMO to be published so that all the necessary information about the functioning of the IMO data collection system is available. As with any new complex process or regulation, this requires time, meaning the two systems will certainly run in parallel for at least the next few years.

Although the industry is concerned about the ‘naming and shaming’ of companies and does not want two different systems, the European parliament believes 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 harmonization between the two systems is initiated in the future, it remains advisable for ship owners and operators to prepare for the first MRV deadline of 31^st August 2017 ahead of time. By examining monitoring and reporting obligations for vessels, as well as shore systems and routines, gaps can be identified and addressed in good time to enable timely and effective compliance.

By Julien Dufour, CEO, Verifavia Shipping

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About Julien Dufour, CEO, VERIFAVIA & VERIFAVIA SHIPPING

Julien is a transport and environmental expert, verifier, researcher, speaker and moderator, with 20 years experience in the transport sector and 7 years experience in carbon emissions monitoring, reporting and verification. He is the Founder and CEO of Verifavia and Verifavia Shipping, the worldwide independent accredited carbon emissions verification bodies for aviation and maritime transport. Verifavia Shipping provides carbon emissions verification guidance and services that enable shipping companies to navigate the requirements of the EU Shipping Monitoring, Reporting and Verification (MRV) Regulation efficiently and effectively. By invitation of the European Commission, Julien is an active member of the ‘Shipping MRV group of experts on verification and accreditation’ under the European Sustainable Shipping Forum (ESSF). Julien holds a Masters in International Management from the ESCP Europe business school.