Emissions reporting

ESPO ports concerned about ‘first signs’ of carbon and business leakage ahead of EU ETS

‘One must realise, that once evasion is established, and trading routes have changed, it will be very difficult to reverse the negative developments,’ says ESPO Secretary General.

Published

3 months ago

September 21, 2023

Admin

The European Sea Ports Organisation (ESPO) on Wednesday (20 September) reiterated its support for an emission trading scheme as instrument for greening the shipping sector but expressed serious concern about first signs of carbon and business leakage due to the limited scope of the current legislation.

It was replying to a public consultation on the list of non-EU neighbouring ports that would fall under the “transhipment clause” that has been introduced in the EU emission trading system (ETS) directive intended to limit the risks of carbon and business leakage once the EU ETS maritime comes into force.

The statement from ESPO is as follows:

For ESPO, the principle to not consider as a “port of call”, in the counting of the ETS charges, the calls to some transhipment ports neighbouring the EU is only a partial solution to the problem. ESPO fully agrees with the identification of Tanger Med and East Port Said as major neighbouring transhipments ports. However, it will not be enough to ensure that evasion cannot take place. While only a few neighbouring ports are reaching the very high transhipment volume thresholds put forward in the legislation (65%), many ports and terminals around Europe have and/or are building up transhipment capacity. The Commission should therefore not only look at current volumes, but also consider the transhipment capacity in the different ports neighbouring the EU.

Moreover, under the current legislation, even if the call at a non-EU transhipment port is subject to the special regime, it is still more favourable for ships to call at a non-EU port than at an EU transhipment port. When ships call at an EU transhipment port, the last leg between the transhipment port and any other EU port is subject to ETS charges for 100% of the journey. On the other hand, if the ships call at a non-EU transhipment port, only 50% of the journey is accounted for.

“We see a real ramping up of investments in additional TEU capacity in ports and new terminals in neighbouring countries, including investments realised by major shipping lines in these ports, and we also hear about first rerouting movements outside Europe. This reinforces the idea that shipping lines, where relevant, are preparing their way out of the EU ETS maritime. We recognise the importance of the EU ETS Directive and supports its aim, but we continue to regret that this legislative framework disadvantages EU ports vis-à-vis non-EU ports, without the expected benefit in terms of emission reduction”, stresses Zeno D'Agostino, Chairman of ESPO.

For the maritime EU ETS to be a success, the European Commission must make sure that the ETS implementation safeguards the competitiveness of European ports, and avoids carbon and business leakage to ports neighbouring the EU.

For Europe’s ports, monitoring should already take place ahead of the application date, as rerouting and evasion movements are already in preparation or happening now. Moreover, the monitoring should happen continuously, not only with a report every two years.

“One must realise, that once evasion is established, and trading routes have changed, it will be very difficult to reverse the negative developments”, says Isabelle Ryckbost, ESPO Secretary General.

While it is difficult to prove a direct causal link between certain rerouting and developments of terminals outside the EU, the level and intensity of recent developments in non-EU ports strengthen the concern of many European affected ports on the possible adverse effect of the EU ETS without the expected environmental benefit. On top of losing transhipment capacity and the corresponding jobs, Europe risks losing oversight and control of the entire supply chain.

Given the current situation and developments and the serious consequences of the implementation of this legislation for the competitiveness and future of some European ports, ESPO hopes for an open, continuous and constructive dialogue with the Commission allowing to map adverse impacts and signal evasion at a very early stage, in view of achieving an ETS that delivers the ambitions it has been designed for.

Photo credit: European Sea Ports Organisation
Published: 21 September, 2023

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Decarbonisation

DNV: Preparing for the EU ETS – next steps

Ship owners and managers should make an agreement on who assumes the responsibilities for the EU MRV and EU ETS and to provide an updated Monitoring Plan to the verifiers, says DNV.

Published

2 weeks ago

November 21, 2023

Admin

Classification society DNV on Friday (17 November) released a statutory news for cargo and passenger ships above 5,000 GT sailing in the EU on the upcoming Emission Trading System:

Background

The EU amended the Emission Trading System (EU ETS) Directive to include shipping from 1 January 2024. The monitoring, reporting and verification requirements detailed in the EU MRV regulation have also been revised to support the EU ETS.

The European Commission (EC) is now in the process of developing implementation and delegation regulations providing more details, and DNV will communicate these in due course.

This news provides an update on the options for the responsible shipping company, as well as other relevant technical, operational and commercial matters when preparing for ETS. Please make sure to visit our revamped EU ETS topic page with a comprehensive FAQ section providing you with even more clarity and guidance on these critical topics.

Shipping company responsible for the EU ETS and EU MRV

The EC has adopted an implementing regulation detailing which company is responsible for monitoring and reporting greenhouse gas (GHG) emissions and surrendering emission allowances. The default responsible entity is the registered owner, also if the ship is on a bareboat charter. The responsibility can be shifted to the technical manager – i.e. the ISM company – only by an agreement between the registered owner and the ISM company explicitly stating the delegation.

The company responsible for monitoring and reporting under the MRV regulation must be the same as the company responsible under the ETS directive for surrendering emission allowances. However, the practical aspects related to monitoring and reporting – such as developing a monitoring plan, implementation, and developing emissions reports – can still be performed by technical management companies.

Options for managing the responsibility and practical aspects related to the EU MRV and EU ETS

There are basically three options for managing the responsibility and practical aspects related to the EU MRV and EU ETS:

1. The registered owner takes on the responsibility for compliance with the MRV and ETS and establishes its own monitoring system

The owner company should provide its Administering Authority (AA – see below) with a list of ships for which it assumes responsibility with the MRV and ETS obligations. The registered owner must establish its own monitoring system, develop a Monitoring Plan, have it assessed by a verifier, and submit it to the AA by 1 April 2024.

2. The registered owner takes on the responsibility for compliance with the MRV and ETS but delegates the practical monitoring to the ISM company

The owner company provides its AA with a list of ships for which it assumes responsibility with the MRV and ETS obligations. The ISM company can continue with the monitoring and reporting as today, but the Monitoring Plan must be updated referring to the owner as the responsible entity.

The ISM company will implement the Monitoring Plan and provide the emissions reports for the registered owner. It is still not decided if it will be possible for the ISM company to submit the plans and reports in Thetis MRV on the owner’s behalf.

3. The registered owner delegates the responsibility for compliance with the MRV and ETS to the ISM manager

The registered owner company and ISM company must sign a document clearly indicating that the ISM company has been mandated by the shipowner to comply with the MRV and ETS obligations. The ISM company may be mandated by several owner companies, but it remains a single shipping company responsible for the combined fleet under the MRV and ETS. Under this option, the existing Monitoring Plan can be continued, provided it is extended with the required additional elements required by the updated Monitoring Plan template (see below).

Shipowners and ship managers should make an agreement on who assumes the responsibility for the EU MRV and EU ETS, and update any documentation as needed.

Administering Authority (AA)

Each company, whether it is the registered owner or ISM company, will be assigned to an AA of an EU/EEA member state. Companies registered in an EU/EEA country will be assigned to the AA of that country. Companies registered outside the EU/EEA will be assigned to the AA of the country where their ships had the most port calls the last four years. The EC will provide a list of companies and their respective AA by 1 February 2024.

Each shipping company responsible for one or more ships under ETS needs to apply for a Maritime Operator Holding Account with its AA, within 40 days after the list is published by the EC. The practicalities related to this will vary between different AAs. The AA is then required to open the account within an additional 40 working days.

The documentation requirements for opening an account are common for all AAs and include:

• General info about the legal entity (e.g., name, address, contact person)

• If the company is the registered owner: a list of ships for which the company assumes control

• If the account holder is part of a group: a document clearly identifying the structure of the group (certified true copy required).

The AA may also ask for a document proving:

• Registration of the legal entity, its bank account details and confirmation of VAT registration

• Name, date of birth and nationality of the legal entity’s beneficial owner, including the type of ownership or control they are exercising

• A copy of the instruments establishing the legal entity

• A copy of the annual report or of the latest audited financial statements, or if no audited financial statements are available, a copy of the financial statements stamped by the tax office or the financial director.

Companies, who know which AA they will be assigned to, should apply for a Maritime Operator Holding Account as soon as possible.

Change of company and partial emissions reports

In case of change of company (i.e., either the registered owner or the ISM company), the MRV regulation requires that a partial emissions report is verified and submitted in the Thetis MRV no later than three months after the change. This ensures that both the previous and the next companies can submit a company level emissions report containing the emissions for which each company was liable for surrendering allowances for under the ETS in the reporting period. The need for a partial emissions report strictly follows from the responsible company, either the registered owner or the ISM company. In case the owner has assumed the responsibility, a change in the ISM company will not trigger the need for a partial emissions report. If the responsibility is delegated to the ISM company and the ship changes owner, it will depend on whether the new owner delegates the responsibility to the same ISM company. If the new owner assumes the responsibility itself, or a new ISM company takes over the responsibility, a partial emissions report is required.

Update of Monitoring Plan

An updated Monitoring Plan assessed to be in conformity by a verifier must be submitted to the AA by 1 April 2024. Regardless of which AA the company is assigned to, the submission of Monitoring Plans and emissions reports is performed through Thetis MRV.

The Monitoring Plan has been expanded to reflect the additional obligations under the MRV and ETS. The new plan template covers, among other smaller adjustments:

Emission factors for CH4 and N2O, in addition to CO2
Procedures related to determining the emission factors for biofuels, RFNBOs (renewable fuels of non-biological origin) and RCFs (recycled carbon fuels)
Emission source class and slippage coefficient values for LNG-fuelled ships
Detailed information on the shipping company
Information on application of carbon capture and storage technologies
Procedures covering data flow activities and risk assessment.

The figure on the following page summarizes the EU MRV/ ETS milestones as discussed in this news.

MRV/ETS requirements timeline

DNV recommends that companies establish or update their Monitoring Plans and submit them for assessment as soon as possible. Conveniently, the revised MRV Monitoring Plan online form from DNV is now available in Fleet Status on Veracity to support the preparation, with information from the previous plan revision readily available. Validation rules and info boxes will guide you to ensure all updated tables are filled in and the plan is ready to be submitted.

MRV Monitoring Plan >>

Recommendations

Ship owners and managers should make an agreement on who assumes the responsibilities for the EU MRV and EU ETS and to provide an updated Monitoring Plan to the verifiers. For DNV customers, the revised MRV Monitoring Plan online form is available in Fleet Status on Veracity. AAs should be updated on the ships as soon as it is clear which AA each company is assigned to. DNV recommends that companies, who know which AA they will be assigned to, apply for a Maritime Operator Holding Account as soon possible.

AAs should be updated on the ships as soon as it is clear which AA each company is assigned to. DNV recommends that companies, who know which AA they will be assigned to, apply for a Maritime Operator Holding Account as soon possible.

Photo credit: CHUTTERSNAP on Unsplash
Published: 21 November, 2023

Emissions reporting

RightSip achieves milestone with first employment of emissions-tracking tech in Japan

Firm said its emissions-tracking technology Maritime Emissions Portal has been employed for the first time in Japan by Port of Yokohama; technology calculates 16 key air emissions from vessels.

Published

3 weeks ago

November 17, 2023

Admin

Australia-based digital maritime platform RightShip on Wednesday (15 November) said its emissions-tracking technology Maritime Emissions Portal (MEP) has been employed for the first time in Japan by the Port of Yokohama.

“Yokohama has long been a pioneering and forward-looking port, and, in 2021, it announced its intention to become carbon neutral and to contribute to a global Green Shipping Corridor. MEP is the ideal solution for this mission,” RightShip said on its website.

Rightship said the MEP is a tool that calculates 16 key air emissions from vessels, using Automatic Identification System (AIS) data and innovative heatmapping technology to give ports a comprehensive view of the environmental impact of shipping within port boundaries and in the surrounding areas.

“With an intuitive workflow, MEP enables ports to develop effective decarbonisation strategies and track their impact over time. Crucially, it also enables ports like Yokohama to benchmark environmental performance, identify best practices, and collaborate with potential partners to achieve the common goal of a Green Shipping Corridor,” it added.

“We are excited to work with the Port of Yokohama, and to contribute to the decarbonisation of Japanese ports and shipping worldwide.”

Photo credit: Joedith Lego on Unsplash
Published: 17 November, 2023

Digital platform

ZeroNorth consolidates existing bunkering business following acquisitions

ZeroNorth Bunker will consolidate its 13 existing product offerings into six core products spanning Bunker Planning, Bunker Procurement, Bunker Supply and Trading, Bunker Pricing and e-BDN solutions.

Published

3 weeks ago

November 15, 2023

Admin

Marine technology company ZeroNorth on Tuesday (14 November) announced that it is consolidating its existing bunkering business under the ZeroNorth brand, to offer faster value delivery for customers, and driving enhanced data-driven insights, additional fuel savings, improved profit margins and emissions reduction.

ZeroNorth said it recognised the importance of digitisation across the entire bunker value chain to accelerate the decarbonisation of the shipping industry.

“To this end, the past 18 months have seen ZeroNorth invest heavily in the bunkering space, acquiring Clearlynx, Prosmar Bunkering and BTS to serve all parts of the market. The integration into ZeroNorth Bunker will see one unified team come together under a single brand, creating synergies across the different solutions to enable faster release of new features that respond to market needs,” it said in a statement shared with Singapore-based bunkering publication Manifold Times.

ZeroNorth Bunker is consolidating the company’s 13 existing product offerings into six core products spanning Bunker Planning, Bunker Procurement, Bunker Supply and Trading, Bunker Pricing and electronic bunker delivery notes (e-BDN) solutions.

“These solutions will facilitate data-driven decisions for customers, with this integrated approach bringing transparency and continuity to customers’ bunkering processes and delivering an enhanced user experience,” the firm added.

Kenneth Juhls, Managing Director for ZeroNorth Bunker at ZeroNorth, said: “Leveraging real-time market insights and with 50 million tonnes of bunkers already traded annually on the platform, we take pride at ZeroNorth in our ability to drive positive change in the bunkering industry. This includes accelerating digitalisation and transparency in the sector, which ultimately contributes towards our customers’ decarbonisation and commercial goals.”

The firm added ZeroNorth Bunker turns millions of live data points into actionable recommendations by optimising the bunkering process.

“More robust insights will be generated for customers through this integrated approach, as more data is being interpreted which will in time enable the data flywheel effect, delivering a positive feedback loop.”

“The platform will be able to deliver deeper, more granular insights into bunker optimisation, reducing fuel consumption and associated costs and emissions for customers, driving benefit for both profit and planet.”

Manifold Times previously reported ZeroNorth acquiring BTS PTE Ltd., a software platform for marine fuel suppliers, headquartered in Singapore.

The deal saw ZeroNorth acquiring BTS’s flagship suite of services - iBMS (Intelligent Bunker Management System) - which is software specially tailored for the marine fuel supply chain.

iBMS was one of the first projects supported by the Maritime and Port Authority of Singapore (MPA) under the Maritime Innovation and Technology Fund (MINT) in the early 2000s.

BTS is currently one of the three digital solution providers in MPA’s current list of approved digital bunkering solutions. MPA launched its digital bunkering initiative on 1 November 2023, becoming the first port in the world to implement e-BDN.

Last year, ZeroNorth launched ZeroNorth Bunker, an integrated solution for bunker planning, procurement, and analytics services. The firm said ZeroNorth Bunker enabled data-driven decision-making across a transparent marine fuel value chain.