From 2024 onwards, shipping companies have to monitor and report their greenhouse gas emissions and surrender emissions allowances accordingly. This page will outline:
1. which ships, voyages and emissions are included (=scope)?
2. who is responsible for compliance with the ETS directive?
3. who to report to?
1. Scope
From 2024 onwards, cargo and passenger ships of or above 5,000 gross tonnage (GT) have to monitor emissions released:
- During voyages between European Economic Area (EEA) ports,
- During voyages from a non-EEA port to an EEA port,
- During voyages from an EEA-port to a non-EEA port,
- Within EEA ports,
- At berth in an EEA port.
The ships have to monitor their emissions of three greenhouse gasses:
- Carbon dioxide (CO2)
- Methane (CH4)
- Nitrous oxide (N2O)
Ships monitor and report their emissions under two different regulations: the monitoring, reporting and verification regulation for maritime transport (MRV) and the EU ETS directive. The two regulations have a different scope. For the MRV regulation, shipping companies have to monitor and report all CO2, CH4 and N2O emissions of their ships. For the ETS directive, shipping companies have to monitor and report CO2 emissions for the following situations:
• 100% of the CO2 emissions of the voyages between EEA ports, within EEA ports and at berth in an EEA port;
• 50% of the CO2 emissions of the voyages between an EEA ports and a non-EEA port.
For the reporting for the ETS directive, other subtractions of the emissions could be the case i.e. due to the use of sustainable biomass. The page “ Monitoring, Reporting and Verification Obligations (Emissions Report) ” goes into more detail on this.
Shipping companies have to surrender allowances for their emissions that fall under the EU ETS scope.
The obligation to surrender allowances will be implemented gradually:
- 40% of verified emissions in 2024
- 70% of verified emissions in 2025
- 100% of verified emissions in 2026
An example: in 2024, a ship traveling from a port outside of the EEA to an EEA port (for instance, Shanghai to Rotterdam) will first monitor all CO2, CH4 and N2O emissions of that voyage. From the total CO2 emissions, 50% is deducted. And over 40% of that number emission allowances must be surrendered in 2025.
2. Who is responsible?
The entity responsible for compliance with the EU ETS and MRV obligations is the shipping company. In the ETS directive and MRV, this is defined as the shipowner or the mandated ISM company.
- Shipowner
The shipowner is the owner specified on a ship’s certificate of registry. The name of the shipowner is that one recorded under the “IMO Unique Company and Registered Owner Identification Number Schem”. The shipowner has to decide whether he mandates the MRV and ETS obligations to an ISM company. In case no decision is taken, the shipowner remains the responsible entity.
- ISM company
The ISM company is the organisation or person that has assumed the responsibility for the operation of the ship from the shipowner. This includes all the duties and responsibilities imposed by the “International Management Code for the Safe Operation of Ships and for Pollution Prevention”. This means that only this ISM company could assume the responsibilities for ETS and MRV obligations from the registered shipowner.
The ISM company needs a mandate from the shipowner. Details on the requirements of the mandate document can be found in the Implementing Regulation 2023/2599.
The ETS and MRV obligations are linked. So the person or organisation that will fulfil the ETS obligations, will also have to fulfil the MRV obligations and vice versa.
The page “practical information for shipping companies” contains a step-by-step guide for fulfilling the obligations.
3. Who to report to? (Administering Authority)
The shipping company needs to fulfil their ETS and MRV obligations with their administering authority. The European Commission published a list of shipping companies and their attribution to the administering authority in a Member State.
The Dutch Emissions Authority is the administering authority for shipping companies attributed to The Netherlands.
More (detailed) information?
More information and frequently asked questions on EU ETS Maritime can be found on the website of the European Commission. The European Maritime Safety Agency (EMSA) has published the recordings and presentations of a webinar on the topic of shipping companies, scope and and responsibilities.