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

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.

Related: Singapore set to become first port in the world to debut electronic bunker delivery notes
Related: MPA Chief Executive: Port of Singapore begins digital bunkering initiative today 
Related: ZeroNorth acquires Singapore’s bunker supplier software provider BTS
Related: ZeroNorth acquires Prosmar Bunker Dashboard solution and Bunker Pricer module
Related: ZeroNorth acquires US-based bunker market platform ClearLynx
Related: ZeroNorth unveils ZeroNorth Bunker for bunker planning, procurement, and analytics
Related: ZeroNorth opens new office in Singapore to expand in Asia

Photo credit: ZeroNorth
Published: 15 November, 2023

Sindre Stemshaug Bornstein, VP Commercial Decarbonisation of marine fuels testing company VPS, shares the firm’s role in REM Offshore campaign which saw its fleet increase its fuel efficiency by 9.8% in three months:

The crews on the REM PSV fleet recently rallied behind the common goal of increasing the fuel efficiency. The results speak for themselves. Over the course of three months the fleet increased its fuel efficiency by a baffling 9.8%. This translates directly to emission cuts and cost savings, totaling 1,700 tons of CO2 emissions saved and a fuel value in excess of half a million dollars.

The objective of the REM Offshore campaign was to proactively reduce vessel emissions levels in key modes of operation, such as dynamic positioning (DP), standby, port and transit eco. To do this, a specific part of the project was built around identifying and overcoming technical and operational barriers. In three of the four modes of operation double-digit savings was achieved during the campaign period. Some vessels even saw savings >20% in certain operational modes. The detailed analytics and measurement of savings was done by leveraging the high-quality fuel and operational data REM is collecting through the VPS Maress data- driven decarbonisation solution.

REM and VPS worked closely during the project, seen here with Linda Stuberg from VPS and Capt. Boyan Boyanov from REM Mira.

REM HSEQ Manager Iliyan Aleksandrov, said: "REM has committed to optimising the energy consumption of our operations and being an active player in the ongoing transition to a more sustainable maritime industry. We achieved our ISO 50001 certification this year, and amongst other initiatives, we were excited to extend our working relationship with VPS Decarbonisation on this campaign. Crew dedication, strong focus on energy efficiency and consumption optimisation, combined with VPS decarb advisory service and Maress software were the key factors in achieving the amazing results.”

One example of a challenge that is a cause for excessive fuel burn was when vessels are in transit and receive speed demands from charterers that might not align with fuel- efficient speeds. The challenge for the crew is to then strike the right balance between vessel speed, fuel efficiency, prevailing weather conditions, and safety.

By using available data and insight around this to engage in close discussions with the charterers it is possible to fine-tune speed based on vessel capabilities and conditions. Closer, data-driven interaction between vessel owner and charterer is often a win-win situation, where the end-result is more efficient vessel operations. In the campaign, REM was also able to use the data collected in Maress to calculate the economic speed of each vessel and pairing this with sailing forecast data led to improved voyage planning and speed management.

"What gets measured gets managed", said Emilian Buksak, Senior Decarb Advisor with VPS. He worked closely with the crew and onshore organisation during the planning and execution of the campaign. 

"The results we see from campaigns like this are just incredible. It was truly motivating to see the whole REM organisation start utilising available data and analytics in new ways. We started seeing patterns and improvement areas that would have been difficult to uncover without high quality data collection and analytics such as provided by the Maress software solution. However, finding the answers is one thing, but there would be no savings if it wasn’t for the focus and eagerness of the crews to really take it to the next level", Emilian continued.

Once a new efficiency level and fleet baseline has been demonstrated in a campaign such as this, it is key to avoid falling back into old patterns. A few ingredients that improve the chances of sustained results are; a continued focus from the organisation and a company culture built around celebrating best practices - in combination with a solid system for showing data-driven insights.

Looking ahead, Iliyan and Emilian discuss with enthusiasm about the next initiatives on the list to reduce fuel and emissions further. They are in full agreement that -even though big strides have been taken and the REM vessels are more efficient than most "...there is more potential to be tapped!"

REM Offshore CEO, Lars Conradi Andersen sums it up: "Decarbonisation is the way forward for our industry. What we have achieved and learned during this campaign will be further implemented within our fleet operational practices to make sure REM continues to be a leader in innovation and green initiatives towards the zero-emission long term target.”

And, if you have been wondering which of the REM PSVs that saw the biggest savings in the campaign, the answer is REM Cetus. Congratulations to the crew.

Photo credit: VPS
Published: 14 November, 2023