GREEN4SEA initiates this special column including expert perspectives on topical environmental issues concerning shipping industry. We have asked global experts to provide feedback on the following question:
What will be the biggest challenge with respect to EU MRV implementation for the key stakeholders and owners in the long run?
Julien Dufour, CEO, Verifavia Shipping
In the long run, when market-based emission control measures are in place, shipping companies will prefer to select a fuel consumption monitoring method that minimises their reported fuel consumption emissions. The most appropriate method is therefore Method C, which is based on fuel data for flow meters for applicable combustion processes. For ships that are not yet equipped with flow meters, the challenge will be to estimate the abatement cost of the use of flow meters and bear the cost of installation. This is because alternative methods A or B are based on quantity of fuel in the tanks including all emissions sources and therefore expected to record higher fuel consumption. Also, when charterers start to integrate energy efficiency parameters into decision-making process, shipping companies will rush towards implementing a method that shows lower emissions to ensure they remain competitive.
John Kokarakis, Vice President, Technology & Business Development, Hellenic, Black Sea Region & Middle East
The drive to reduce greenhouse gas emissions from ships continues and the latest act of the drama, or maybe not, is the establishment of regulations to monitor, report and verify CO2 emissions by both IMO and the European Union . Once again, the two giants are fighting as to the finer points of the regulation and the pace of implementation. The greatest challenge is to align the two sets of regulations and avoid unnecessary duplication of effort. Target is to establish a common, simple and effective emissions data capture system without the extra challenge of two diverging paths. Industry supports a single global framework for collecting CO2 emissions data. Major hurdles facing the harmonization are their timing and underlying philosophy.
Maria Bruun Skipper, Director, Danish Shipping
The Paris agreement and the global commitment to reduce the CO2 emissions, is the largest challenge ever for the shipping industry. Danish Shipping supports the EU MRV, as we see it as an important first step towards a global mapping of CO2 emissions. It is however very important that IMO move as well and last year the Marine Environmental Protection Committee agreed on a roadmap for a future IMO CO2 regulation system. The largest challenge for the ship owner in relation to the EU MRV is the risk of double reporting, i.e. when the IMO system is implemented, reports will be required for both EU and IMO. The CO2 challenge is a global challenge and therefore the monitoring and target setting should ultimately be the responsibility of IMO.
Panos Zachariadis, Technical Director, Atlantic Bulk Carriers Management Ltd
There are several challenges in the short run, especially for those most affected i.e. the poor owners. They have to comply with a nonsensical, very complicated and totally unnecessary regulation, including a period of 1-2 years overlap with the much more reasonable IMO MRV. During that overlap period owners may be called to comply with both MRVs which is double the effort, expense and paperwork. The EU MRV is designed for ETS as the future Market Based Measure. EU was not happy when IMO approved its “global” MRV, which is not geared strictly for ETS. In the long run, I can only see that EU will have to drop its MRV once IMO’s comes in force. The proper thing would be to do it immediately to avoid an overlap period where two MRVs would need to be complied by owners. I hope this happens smoothly, saving face for EU. In the opposite case, if EU insists, the problems will be huge for owners but even bigger for EU’s trade.
Kostas G. Vlachos, Chief Operating Officer, CMM-CONSOLIDATED MARINE MANAGEMENT Inc.
In reply to the question I believe the greatest challenge in the EU MRV implementation will be the development and implementation of procedures for recording, retrieving, transmitting and storing information regarding measurements. In particular the challenge will be for the owners/operators to determine
- How the data are being processed and what controls are in place;
- Input Controls (Measured DATA to Hard copies)
- Transformation controls (error checking during the process of collating, transferring, processing, calculating, estimating, aggregating or adjusting input data)
- Output controls (Comparison between input and output)
- How the data are being transmitted to the company; (Noon Electronic Reports)and who and how (method/certification) has validated the accuracy of transmitted data
- With what frequency
Panos A. Kourkountis, Technical Director, Andriaki Shipping
The vision of the EU regarding the MRV is still unclear. The ships’ activities will be monitored and assessed by the authorities as optimized or not and relevant charges will be applied. MRV reports could be used by the authorities the way the receipts/invoices are used to monitor the business activities in other sectors and to determine the relevant tax. Operating and monitoring the ships in a way that will be defined by the authorities as “optimal” could be vital for the future of the companies. Shipowners should seriously consider investing in those tools that will assist them in keeping abreast of the competition for “optimal operation”.
Stamatis Fradelos, Principal Engineer, Operational & Environmental Performance (OEP), ABS
One of the primary challenges with the implementation of the EU MRV regulation will be the alignment between regional and international regulatory schemes, especially overcoming the differences on the verification and anonymization of the reported data. As the International Maritime Organization (IMO) finalizes the Data Collection System (DCS) and develops its strategy for reduction of marine greenhouse gas emissions (GHG), EU MRV will need to be considered to help promote consistency and more streamlined compliance between the two regulatory schemes.