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Shipping companies will be obliged to monitor and report additional greenhouse gas emissions emerging from its vessels from 01st January 2024.

In the latest Merchant Shipping Notice (MS Notice 182), the Authority for Transport in Malta highlights recent amendments to the Regulation (EU) 2015/57 (MRV Regulation) on the monitoring, reporting, and verification of carbon dioxide emissions from maritime transport. It also emphasizes the relevance of MS Notices 133, 137, and 140, which reinforce the MRV Regulation and THETIS-MRV.

The enactment of the MRV Regulation was a crucial step towards decarbonizing maritime transport. Through Regulation (EU) 2023/957 (ETS Regulation) on 10th May 2023, the MRV Regulation was amended to include references to the EU Emissions Trading System (ETS) and to the monitoring, reporting and verification of additional greenhouse gas emissions from vessels.

As of 01st January 2024, the ETS Directive (Directive 2003/87/EC) will be extended to cover maritime transport emissions, aligning with the European Union’s climate policy. This extension will oblige shipping companies to monitor emissions closely and purchase or surrender ETS emission allowances for each ton of reportable greenhouse gas emissions which are reportable under the EU Emission Trading System.

In addition, the MRV Regulation will be broadening its scope to include the monitoring of methane (CH4) and nitrous oxide (N2O) emissions, in addition to CO2 emissions that are already reportable. This will be done through the THETIS-MRV system which will be accessible to shipping companies, verifiers, and administering authorities. The aim of the THETIS-MRV system is to streamline the issuance of documents of compliance and to serve as a centralized platform for all concerned parties for the consultation of emission reports.

The Shipping Companies may appoint ISM companies that are compliant with the International Safety Management and International Ship and Port Facility (ISPS) Codes through a mandate to take responsibility for the management of the vessel.

The administering authorities, acting on behalf of the Member State, will oversee the EU Emission Trading System for shipping companies, approve Ship Monitoring Plans (SMP), and ensure compliance with MRV and ETS obligations. An SMP should include information about the sources of the CO2 emissions of the vessel as well as a description of the procedures in place to update these emissions within the reporting period. It must also include a description of the procedures used to ensure that the list of voyages, emission factors, fuel consumption, data per voyage and how surrogate data for closing data gaps is determined, are completed.

The abovementioned verifiers are responsible for assessing the SMPs that are submitted through the THETIS-MRV system, for verifying partial and annual emission reports and for assessing conformity of ship emission reports.

Furthermore, the MRV regulation will extend to cover general cargo ships and offshore ships between 400 and 5,000GT, as well as those exceeding 5,000GT with effect from 01st January 2025. Following this, by 31st March of each year, the emissions reports for the preceding year must be submitted to the administering authorities, flag State authorities, and the European Commission, only if the accredited verifiers deem them satisfactory. Additionally, the shipowners of vessels falling within the scope of the ETS Directive, must submit a satisfactory report to the administering authority through the THETIS-MRV system by the same date.

The satisfactory report will be at company level containing information regarding the shipping company and its vessels together with a sum of all the ships’ aggregated emissions of greenhouse gas emissions which must be reported according to the ETS Directive. The results of the report must then be submitted to the EU registry.

In line with the ‘polluter pays’ principle, the MRV Regulation and ETS Directive aim to mitigate the environmental impact of shipping emissions. These Union-wide rules, effective from 01st January 2024, promote transparency by making reportable emission data available to the public, whilst contributing to the long-term preservation of the global environment.

Av. Jodie Darmanin

Junior Associate

Mifsud & Mifsud Advocates

For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.