MRV (Monitoring, Reporting and Verification) regulation

Statutory: The MRV (Monitoring, Reporting and Verification) regulation aims to quantify and reduce CO2 emissions from shipping and will create a new kind of benchmarking system in Europe. DNV GL has prepared an overview of how MRV will affect the maritime industry and what shipping companies need to do to achieve compliance.

The regulation in a nutshell

The European Commission (EC) is bringing emissions from shipping into its 2009 climate and energy package. MRV is designed to progressively integrate maritime emissions into the EU’s policy for reducing domestic greenhouse gas emissions (EU regulation 2015/757). MRV requires ship owners and operators to annually monitor, report and verify CO2 emissions for vessels equal to or larger than 5,000 GT and which call at any EU port. The results will be published on a regular basis. Entered into force on 1 July 2015, the regulation will become fully effective on 1 January 2018. 

Shipping companies will need to prepare a monitoring plan by 31 August 2017 at the latest for each of their ships that falls under the jurisdiction of the regulation. They will have to monitor and report the verified amount of CO2 emitted by their vessels on voyages to, from and between EU ports and will also be required to provide information on energy efficiency parameters (see below). Data collection will start on a per-voyage basis from 1 January 2018. Once the data is verified by a third-party organization and sent to a central database, presumably managed by the European Maritime Safety Agency (EMSA), the aggregated ship emission and efficiency data will be published by the European Commission by 30 June 2019 and then every consecutive year. 

Monitoring and reporting

Ship owners will have to monitor the following parameters on a per-voyage basis:

• Port of departure and port of arrival, including the date and hour of departure and arrival
• Amount and emission factor for each type of fuel consumed in total
• CO2 emitted
• Distance travelled
• Time spent at sea
• Cargo carried
• Transport work

In addition to the companies reporting annually aggregated figures for the parameters, the data is to be used to calculate and report average energy efficiency.

The basis for the calculation of CO2 emissions will be the fuel consumption for voyages starting or terminating at any EU port. Fuel consumption shall be determined and calculated using one of the following methods:

• Bunker Fuel Delivery Note (BDN) and periodic stock takes of fuel tanks
• Bunker fuel tank monitoring on board
• Flow meters for applicable combustion processes
• Direct CO2 emissions measurements



EU MRV regulations will have a significant impact

• Verification

Accredited verifiers will have three key tasks: 1. to verify ship-specific monitoring plans, 2. to verify that the annual ship-specific emissions reports comply with the monitoring plans and 3. to verify that the figures contained in the annual ship-specific emissions reports are accurate. Presently, no companies have been granted accreditation, as criteria remain under development by the EC. It is clear that the EC will not only consider class societies as potential verifiers, but will also add other organizations to the list.

Timeline

• 31 August 2017 – Companies are to submit ship-specific monitoring plans to verifiers for approval
• 1 January 2018 – Per-voyage monitoring to start
• 30 April 2019 – Verified annual emission reports submitted to the EC
• 30 June 2019 – Emission data made publicly available by the EC

This cycle will then repeat for subsequent years. 

Outstanding issues

A number of issues governing the implementation of the regulation remain to be settled. These include details of cargo monitoring and efficiency calculation, the inclusion of AIS-based verification, criteria for accreditation of verifiers, and the development of monitoring plans and reporting templates. Industry stakeholders, including DNV GL, are providing input to the EC through the European Sustainable Shipping Forum (ESSF). The EC plans to publish documentation for the outstanding issues towards the end of 2016.

Recommended actions 

The practical impact of the MRV regulation on owners and operators is not yet fully clear. There will be a need to monitor and report data, but the exact formats and templates for doing so are not yet available. Nevertheless, it would be advisable for ship owners and operators to prepare for MRV ahead of time and start considering how to best fulfil the forthcoming monitoring and reporting obligations for their own ship as well as their shore systems and routines ahead of time. Steps such as developing the mandated monitoring plan as well as examining how to best collect, aggregate and report fuel consumption and transport work data for their ships are particularly important.