Understanding MRV

Anastasia Kouvertari, Hellenic Lloyd’s S.A gave a presentation on ‘’Understanding MRV’’ during the 2016 GREEN4SEA Conference & Awards. She addressed the main axes of the EU Regulation as well as the areas that remain to be clarified. She discussed both the monitoring and the verification aspect within a pragmatic and practical context that builds upon existing understanding of the shipping industry in the lowest administrative way possible. She said that standard practices on fuel consumption monitoring and alignment with systems like ISO 50001, ISM and SEEMP are key to compliance, overlooking potential future challenges stemming from a global ship GHG data collection scheme.

EU MRV system is the first step of a staged approach that the Commission has decided to embark upon with the aim of the reduction of CO2 emission at a level of 40% or even 50 % if possible until 2050. This is with regards to the baseline of 2005 emission limits. This is alongside other contributions already being made by other sectors of the economy

A few questions that we need to make to ourselves before these short presentations are the following: do we have to comply with the EU MRV given the fact that MPC 69 in about 10 days is about to possibly adopt a new IMO global MRV system? What are the possible changes that have been proposed for MARPOL Annex 6? And finally, can we have a soft landing to what is possibly going to be a reality of an IMO global MRV system?

Understanding MRV will place the regulation and address some of the main angles addressing both the monitoring and verification part which are equally important for us. The scope of the MRV regulation applies to ships of 5,000 gross tonnage and above, regardless of flag, which undertake inter European voyages; all voyages in coming from an non EU port to the first EU port of call and outgoing voyages from an EU port of call to the next non EU port. Of course there are some exceptions here: warships, naval auxiliaries, wooden ships of primitive build, ships not propelled by mechanical means and government ships are excluded from the application field. An important note that we should be making is that the regulations cover only activities that refer to commercial purposes. Therefore, every voyage that has as a purpose to disembark or embark passengers, unload or load cargo is included within the application field, and some statistics: in terms of the impact of the regulations until 2019 it is estimated that around 16,400 ships will be directly affected by the EU MRV regulation.

The regulation of the implementation schedule has entered into force since 1st July 2015. We are in the middle of a preparation period, at the moment, whereby by 31st August 2017 each vessel should have a monitoring plan developed in accordance with the mandate of the regulation. Officially, the first reporting period starts on the 1st January 2018 and will last for one calendar year. At every consecutive period which is one calendar year thereafter, on the 30th April an emissions report should be submitted to the verifier in order to get the approval and by 30th June its calendar year a document of compliance shall be issued based on the approved emissions report.

So what will it mean for the ship owners? A monitoring plan should be developed in accordance with the provisions of the regulation to cover the specific method or methods to monitor carbon emissions and this will be assessed for conformity by the verifiers which are independent third parties accredited within EU. The reporting element is equally important and this will be done on an annual basis based on aggregate data.

For each voyage, we are monitoring the CO2 emitted as a function of fuel consumption multiplied by the emission factor, for here we use the default values of the IMO for the emission factors for its emission sources. This includes main engines and auxiliary engines, inert gas generators, boilers etc. we do monitor transport work, so the actual distance travelled is being multiplied by the cargo carried expressed in metric tons TEU and other measurement in accordance with ship type and also the date and time spent at port and the time spent at sea. There are some exceptions here as well: ships engaged in short sea shipping so ships that are only trading within EU ports within a calendar year and ships performing more than 300 voyages per calendar year within EU should be exempted.

The methods that are acceptable by EU MRV are four in order to measure CO2 emissions. The first and foremost, the most popular one and basically the most reliable one at this moment is the BDN with a correction on the density of the fuel in accordance with the ISO 8217 standard. The second one is the bunker tank fuel measurement based on automated system and soundings, the third one being the fuel flow meters, preferably the mass flow meters and the fourth one, direct emission monitoring. Here, we need to highlight that the IMO currently, at the proposal being discussed, for adoption on an IMO greenhouse gas emission data collection tool on fuel consumptions: they are discussing two methods, the BDN and the flow meters; so there is a small deviation there. What needs to be monitored and reported on an annual basis is the aggregated annual data on the amount and emission factor per fuel type, CO2 emissions, fuel consumption, distance travelled, time at sea, transport work and average energy efficiency. Specifically, for the average energy efficiency this is going to be monitored based on all the four parameters. The total fuel consumption per distance travelled, per transport work and CO2 emissions, the total emissions per distance travelled and transport work.

The checking of the monitoring plans in conformity with the mandate of the EU MRV regulation, the approval of the emissions report or the issuance of the document of compliance, the communication with the flag administration and the commission for the publicity of the data; all these are responsibilities of the verifiers. One could ask himself what are the key differences between this and what we do now. Shipping industry has an extensive knowledge of how to measure CO2 emissions from years, however, there are some areas where we have differences and deviation: this is the monitoring, specifically on the cargo side of things EU MRV uses the deadweight that is relevant to the cargo carried whether the IMO is discussing an approach based on the design deadweight. With regards to the distance, it has been a tacit agreement that the birth to birth definition shall be used. Of course, this remains to be further finalized. Uncertainty is a big issue: so how much are data measurements accurate? The EU MRV calls for uncertainty to be integrated into the monitoring plan and accounted for in terms of materiality. How much we don’t need to check- so this goes for the verifiers- how can they be certain that the data they are verifying is the accurate one, and last but not least the reasonable assurance; the degree of confidence the verifier has, and this is higher than the limited assurance.

All these are challenges that need to be specified and overcome in order to have a successful implementation of the regulation. What we don’t know is the level of materiality, the accreditation bodies and methods- at this point it is worth mentioning that the verifiers for the EU MRV should have both the marine and verification competency. The format templates for the monitoring plan and the emissions’ report should be out soon; the data exchange formats, the electronic systems to be used, the uncertainty calculation guidance which is really important, and penalties of noncompliance to be specified. At this moment, as we stand, there have been two consecutive years of failure to comply resulting in an expulsion from entrance into EU ports. And of course, one big issue is the future harmonization with the IMO; right upfront from the proposal for the adoption of the EU MRV system, there was the intention-in case there is an IMO global MRV system-to review the provisions of the EU MRV in order to align this regional system with the global one. Of course, this remains to be seen as appropriate and how feasible this will be.

So, as far as mapping the way to cleaner emissions is concerned: we do advocate a practical approach to compliance whilst achieving the desired goals. Of course, the IMO has gone a long way but we need to take into account that there are projections about increase of the world trade, hence there are going to be increases in the CO2 emissions. We do advocate moreover building upon standards that the shipping industry already has, current practices and use the expertise and knowledge from the day to day business. Of course utilization and alignment with ISO 50001 within the companies is important too. The challenge ahead is called “Global Ship GHG Data Collection Scheme of the IMO”. It remains to be seen what the link with the EU MRV is, what are going to be the Greenhouse Gas reduction targets that are going to be surely distinct from the existing technical and operational measures as we currently have them.

In conclusion, for a successful implementation the key is adaptation. It remains to be seen how companies will manage the training of their crews and people on shore and how they are going to validate the data sets needed for a complete monitoring reporting and a meaningful verification.

Above text is an edited article of Anastasia Kouvertari’s presentation during the 2016 GREEN4SEA Conference & Awards.

You may view her video presentation by clicking here

The views presented hereabove are only those of the author and not necessarily those of  GREEN4SEA and are for information sharing and discussion  purposes only.

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About Anastasia Kouvertari, Senior Environmental Business Development Specialist, Hellenic Lloyd’s S.A.

Anastasia Kouvertari holds an academic degree from Panteion University of Social & Political Sciences in the field of International and European Studies. After completing her Bachelor’s Degree, she obtained an MSc in Environment and Development from London School of Economics. In 2004 she joined the Lloyd’s Register Group and worked as part of the Business team in the Piraeus office. Currently she holds the position of Senior Environmental Business Development Specialist in the Marine Fuels & Environment Department in Hellenic Lloyd’s S.A. Anastasia has completed an Internship at the Greek Ministry of Foreign Affairs, in the Directorate for UN and other International Specialised Organisations and had been an associate for a number of years in MEPIELAN (Mediterranean Programme in Environmental Law and Negotiations). Part of her role had been the translation into Greek of the Barcelona Convention(1976) and its seven Protocols on the addressing specific aspects of Mediterranean environmental conservation. Under her current role, Anastasia is responsible for LR’s core environmental Notations assigned to ships and for providing sound regulatory advice and training in her environmental discipline to clients in the maritime sector.