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DNV: EU defines offshore ships for EU MRV reporting

From 1 January 2025, offshore ships above 400 GT are required to report GHG emissions data under the EU MRV regulation.

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Classification society DNV, an accredited verifier for the EU MRV verification services since 2018, on Friday (8 November) issued guidance for offshore vessels under the EU MRV scheme:

Offshore ships above 400 GT are required to start reporting GHG emissions from 1 January 2025.

The adopted Delegated Regulation (to be published by the end of 2024) amends the EU MRV Regulation 2015/757 stating that the following ships designed or certified to perform service activities offshore or at offshore installations should be considered offshore ships:

Ship types

ship types

The ship’s statutory certifications or any other relevant documentation, including class notations, should be taken into consideration to determine whether the ship falls under the definition of an offshore ship or not.

DNV does not consider platforms and rigs, such as jack-ups and semi-submersible platforms, to fall under any of the ship types listed. Therefore, for such objects there is no need to prepare an MRV Monitoring Plan and start reporting. However, more guidance may be issued later specifying this list further.

Company responsible for the EU MRV Monitoring Plan

According to the MRV regulations, the registered owner is the company responsible, unless it has explicitly mandated the ISM company.

The company responsible should submit the Monitoring Plan to an accredited verifier for assessment and then to the company’s administering authority as soon as possible in time for the reporting period starting 1 January 2025.

EU ETS from 1 January 2027 (>5,000 GT)

Note that offshore ships of 5,000 GT and above will fall under the scope of the EU ETS from 1 January 2027, while ships of 400 GT and up to 5,000 GT will be reviewed by 31 December 2026 for inclusion at a later stage.

A company that is only responsible for offshore vessels (and not responsible for other ship types) does not need to open a Maritime Operator Holding Account, as the EU ETS does not apply to these ships before 2027.

Voyage-based reporting in the EU MRV

The inclusion of offshore ships in the EU MRV scheme from 2025 implies that each port of call and voyage must be monitored and reported. Reporting in regular intervals (such as every day at noon or at midnight) should be supplemented by reports documenting the start and end of a port call. In addition, emissions resulting from ship movements within a port of call should be monitored and reported. Relevant resources for reporting:

Port definition

The European Commission is expected to publish guidance related to stops at offshore facilities. Apart from port facilities ashore, which should naturally also be considered as a port in the context of the EU MRV Regulation, the following should be considered as a port:

  • An offshore facility (such as an FPSO, FSRU) with an assigned UN/LOCODE
  • An offshore facility located outside of the port but permanently connected to a port (such as loading buoys)

If an offshore ship stops at such a facility to load or unload cargo, embark or disembark passengers, or relieve crew, it will be considered a port of call under the EU MRV Regulation. Relevant resources:

Definition of “port of call”

An MRV voyage is defined as being from one port of call to another port of call, and any activities carried out in between are considered part of the voyage.

For an offshore ship, if at least one of the following conditions are met, a stop in a port is considered a port of call:

  • A port where the ship stops to load or unload cargo or to embark or disembark passengers
  • A port where the ship stops to relieve the crew

In addition, ship-to-ship transfer within port limits is considered a port of call in the EU MRV Regulation. In the voyage scenario below, the MRV voyage A starts when ship’s crew embarks the vessel in a member state port. The vessel proceeds to a service area (e.g. offshore installation, project site, research area) to perform service activity and later returns to a member state port to relieve the crew. The MRV voyage covers the time from departure from port, the transit to service area, the service activity and the transit back to port until arrival in port.

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Reporting of cargo carried

As per the Implementing Regulation (EU) 2016/1928, for ship types not falling under any of the defined categories of the regulation, cargo carried is determined as mass of cargo on board or as deadweight carried for laden voyages and zero for ballast voyages. Offshore ships should comply with this requirement and additionally monitor the number of passengers and crew members to determine the port-of-call status. Pending further guidance from the European Commission, we recommend that all personnel on board is reported as either passengers or crew members. Relevant monitoring procedures should be reflected in the ship’s MRV Monitoring Plan.

Guidance documents

The European Commission is expected to publish guidance materials specific to the topic of offshore ships’ inclusion in MRV/ETS. Until it is in place, the guidance for shipping companies, “The EU ETS and MRV Maritime – General guidance for shipping companies (Guidance Document No. 1)” covers applicable topics. Since the document is expected to be updated in the coming months, please refer to the European Commission’s dedicated website where the most current guidance documents can be found, see below under Resources.

Recommendations

Shipping companies responsible for any ship type defined in this news should prepare an MRV Monitoring Plan and start collecting MRV data from 1 January 2025.

Companies should review their data monitoring procedures and adjust these to the MRV per-voyage reporting requirements: set up a Thetis-MRV account and request attribution to an administering authority (as per Chapter 2.4 of the Guidance Document No. 1).

 

Source: DNV
Photo credits: Manifold Times, DNV
Published: 13 November 2024

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Methanol

China: CHIMBUSCO Jiangsu completes methanol bunkering operation in Taizhou

Firm successfully delivered 79.5 metric tonnes of methanol bunker fuel to container ship “NCL VESTLAND” using a mobile methanol bunkering skid at Taizhou Sanfu Marine Engineering.

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China: CHIMBUSCO Jiangsu completes methanol bunkering operation in Taizhou

CHIMBUSCO Jiangsu on Tuesday (3 December) said it successfully refuelled the new methanol dual-fuel powered 1,300TEU container ship NCL VESTLAND at Taizhou Sanfu Marine Engineering.

The total amount of methanol bunker fuel delivered to the boxship was 79.5 metric tonnes.

CHIMBUSCO Jiangsu said the implementation of bunkering operation marked a major breakthrough for the company in the application of alternative fuels for ships, marking its ability to supply methanol marine fuel to ships on a regular basis.

A mobile methanol bunkering skid jointly developed by CHIMBUSCO Jiangsu and COSCO (Lianyungang) Liquid Loading & Unloading Equipment was used for the bunkering operation, which was successfully completed in 2.5 hours. 

In a separate statement, COSCO Shipping said the bunkering operation represented CHIMBUSCO Jiangsu’s first marine methanol fuel supply onshore.

The mobile methanol filling skid operates using the pump as its power source to facilitate simultaneous unloading and refuelling tasks. 

This skid includes several key functional modules, each of which is highly integrated. This integration ensures a safe and efficient process for transferring methanol fuel from tankers to a vessel’s fuel bunker, while also enabling seamless operation and intelligent management. 

The mobile methanol filling skid offers flexibility, requires low initial investment, and boasts a rapid bunkering rate of 180 cubic metres (m3) per hour. 

It stands as an optimal solution for methanol bunkering in the era before widespread adoption of methanol bunkering vessels. Additionally, it can provide bunkering support for shipyards to test new vessels and meet the bunkering requirements of the shipyard,” it added. 

 

Photo credit: CHIMBUSCO Jiangsu
Published: 6 December, 2024

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LNG Bunkering

SEA-LNG: Invest more in LNG bunker vessels, supply and liquefaction infrastructure

LNG bunker market, while growing substantially, is lagging and concerns persist regarding the ability to supply the rapidly growing fleet of LNG-fuelled vessels.

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SEA-LNG: Invest more in LNG bunker vessels, supply and liquefaction infrastructure

Industry coalition SEA-LNG on Thursday (5 December) said that while the approximately 2,200 LNG-fuelled vessels and LNG carriers represent only ‘two minutes into the hour’ of the global fleet of approximately 60,000 deep sea vessels, it remains an adolescent fuel that is maturing significantly faster than other alternative bunker fuels. 

However, it said the LNG pathway still needs more investment, especially in landside facilities for liquefaction near ports, bio and synthetic methane production and bunkering capacity worldwide.

This year has witnessed unprecedented investment in the maturing and scaling of LNG from ship owners.  LNG is starting to dominate as the preferred future fuel pathway. 

However, the bunker market, while growing substantially, is lagging and concerns persist regarding the ability to supply the rapidly growing fleet of LNG-fuelled vessels.

Peter Keller, Chairman, SEA-LNG, said: “With high profile owners now choosing the LNG pathway, we anticipate this trend will continue and accelerate through 2025 and beyond.”

“As the various alternative fuel pathways mature, there is a growing realisation that, despite previous aspirations, some alternative fuel pathways – like the LNG pathway – are more practical and realistic than others.”

“While investment in newbuild LNG-fuelled ships is robust, we need to see the same for bunker vessels, supply and liquefaction infrastructure. As the LNG pathway continues to mature and the use of liquefied biomethane and eventually e-methane increases, the delivery of the fuel to vessels must be assured and the investment gap closed.”

Keller added: “There are approximately 60,000 deep sea ships on the water and, today, we’re looking at around 600 LNG capable ships afloat with a further 600 on order. There are another 1,000 LNG cargo carriers and bunker vessels of varying sizes.”

“While that’s a small percentage of the global fleet, as the clock ticks towards shipping’s emissions reduction targets, the LNG pathway is maturing far faster than other alternative fuels.”

According to DNV there are currently 54 methanol vessels and 2 ammonia vessels on the water.

There are aspects of LNG usage that are fully mature – safety for one. LNG is easy to transport, poses minimal, if any, risk to marine environments, has a low flammability range and is non-toxic. Effective regulations, standards and guidelines for safe operations are widespread, and LNG has been shipped around the world for almost 60 years without any major incidents at sea or in ports.

Keller continued: “When compared to traditional fuels, LNG is more of a teenager with all the growing pains, challenges and victories associated with adolescence.”

“But it is maturing all the time as the market continues to grow, new build orders continue to rise, and the LNG pathway with biomethane and eventually e-methane produced from renewable hydrogen, gains acceptance globally.”

“Shipping stakeholders are investing in LNG because it provides a low risk, incremental pathway for decarbonisation, starting now.  The other alternative fuels are basically toddlers by comparison.  And when it comes to safety, some are mere newborns!”

Another critical need in the maturing process during a period of increased regulation of carbon emissions is the adoption of standardised chain of custody models on a worldwide basis. 

Chain of custody models are becoming increasingly important to maritime decarbonisation as they provide mechanisms to verify that the fuels used are low carbon. 

Such verification creates investor confidence in new fuel supply chains and accelerates the transition to low-carbon fuels, enabling early adoption in conditions of limited supply. 

“They will create a market for green fuels by connecting buyers to fuel producers away from bunker ports enabling faster scaling and providing flexibility to shipping companies at lower cost,” SEA-LNG added.

 

Photo credit: SEA-LNG
Published: 6 December, 2024

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Bunker Fuel

Cost-efficient strategies can significantly cut price of FuelEU Maritime compliance, says DNV

Adoption of the most cost-effective strategy can result in savings of up to 16% or USD 21 million over a vessel’s lifetime compared to using Bio-MGO as a compliance option, according to new DNV white paper.

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Classification society DNV on Thursday (5 December) said compliance with FuelEU Maritime requirements will be expensive but applying certain strategies can significantly reduce the cost.

This was one of the main highlights of its latest white paper outlining FuelEU Maritime requirements and compliance strategies for shipowners. 

Effective from 1 January 2025, the rules mandate stringent greenhouse gas (GHG) emission intensity requirements for ships over 5,000 gross tonnage (GT) transporting cargo or passengers for commercial purposes in the EU/ EEA. GHG emissions are calculated from a well-to-wake perspective. In addition to emissions from onboard combustion, this calculation also includes emissions related to the extraction, cultivation, production, and transport of the fuel. 

The regulation includes provisions for crediting ships using wind-assisted propulsion.

The DNV paper provides shipowners with insights to reduce compliance expenses and avoid major penalties. It contains a comprehensive overview of the regulation, including a case study which highlights a range of different compliance strategies. 

This shows how the adoption of the most cost-effective strategy can result in savings of up to 16% or USD 21 million over a vessel’s lifetime compared to using Bio-MGO as a compliance option.

Knut Ørbeck-Nilssen, DNV Maritime CEO, said: “It is essential that shipowners understand the requirements and compliance options related to the FuelEU Maritime regulation to make informed business decisions. Adopting a cost-efficient strategy with the right combination of measures can help shipowners reach compliance at reduced costs.

“Just paying the penalty could prove a more costly option. All parties must understand their potential obligations and privileges, and how these might affect their commercial and compliance agreements. Crucial to this is verified emissions data, which can maintain operational and commercial integrity across the maritime value chain.”

The report provides recommendations for shipowners including securing long-term fuel agreements and implementing energy efficiency measures. It also recommends considering pooling as a mechanism for sharing and optimizing costs. This is underpinned by a call to begin preparations immediately. The report also highlights how, by leveraging digital tools, maritime stakeholders can access verified emissions data, a key factor in compliance and maintaining both operational and commercial integrity throughout the value chain.

A key point emphasized in the report is that the International Maritime Organization is also set to introduce similar regulations in the near future, with a net-zero framework expected to be adopted in the fall of 2025 and come into force around mid-2027.

It is absolutely essential that shipowners understand the requirements and compliance options related to the FuelEU Maritime regulation so that they are equipped to make informed business decisions. Adopting a cost-efficient strategy with the right combination of measures can help shipowners reach compliance and significantly reduce costs.

“Doing nothing and paying the penalty could prove to be a costly option. All parties must understand their potential obligations and privileges, and how these might affect their commercial and compliance agreements. Crucial to this is verified emissions data, which can maintain operational and commercial integrity across the maritime value chain.”

The report provides recommendations for shipowners including securing long-term fuel agreements and implementing energy efficiency measures. It also recommends considering pooling as a mechanism for sharing and optimizing costs. This is underpinned by a call to begin preparations immediately. The report also highlights how, by leveraging digital tools, maritime stakeholders can access verified emissions data, a key factor in compliance and maintaining both operational and commercial integrity throughout the value chain.

A key point emphasized in the report is that the International Maritime Organization is also set to introduce similar regulations in the near future, with a net-zero framework expected to be adopted in the second half of 2025 and come into force around mid-2027.

Note: The full whitepaper titled ‘FuelEU Maritime: Requirements, compliance strategies, and commercial impacts’ by DNV can be downloaded here.

 

Photo credit: DNV
Published: 6 December, 2024

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