Smaller ships warned: Prepare NOW for major rule changes

The deadline for the FuelEU Monitoring Plan (a different regulation, applicable to ships above 5,000GT calling at EU Ports) was 31 August 2024.

However, for general cargo ships between 400GT and 5,000GT and offshore ships above 400GT, the monitoring period begins on 1 January 2025.

These ships should have an approved EU MRV monitoring plan onboard for compliance before this period begins.

It’s a complex set of rules, and companies like Normec Verifavia, which verify the emissions under different regulations, can help shipping operators ensure compliance.

For the first time, operators of general cargo ships between 400GT and 5,000GT and offshore ships over 400GT will have to submit EU MRV monitoring plans and record emissions, which will have to be verified by an accredited verifier.

“With the amendments to the EU MRV directive, the scope of vessels has been expanded to those over 400 gross tons,” says Rajat Bishnoi, Business Unit Director for Emissions and Performance at Normec Verifavia. “All offshore vessels, barges, tugs, etc, will be included.

“The first monitoring period will begin in January next year – and by March 2026, emission reports will have to be verified by an accredited verifier.

“EU MRV began in 2018 with ships above 5,000 gross tons, and since then there has been no looking back.”

Major headache

Not much will change for general cargo ships between 400GT to 5,000GT as general cargo ships above 5,000GT were already under these stringent reporting rules, but for the growing fleet of offshore vessels it will be a major headache.

“Any changes in the reporting parameters for EU MRV for offshore ships will come in a dedicated Act that has been put forward to the industry for their feedback and has not yet been adopted, but what I understand has changed is the Port of Call definition for offshore ships,” says Bishnoi.

“A Port of Call refers to a ship’s visit to a port for commercial activities, such as the loading or the unloading of cargo, or the embarkation or disembarkation of passengers. In the offshore industry, stops for the purpose of relieving crew will also be considered as a Port of Call.

“If a vessel begins its voyage in Singapore and ends in Europe, the entire route will be included in the EU MRV emissions report – unless it is delivery of a new-build.”

The emissions considered under EU MRV are methane, nitrous oxide, and of course, CO₂, will all be put under the GHG umbrella and calculated as CO₂ equivalent.

“We check the accuracy of the emissions report and verify the final amount of GHG emissions within the scope of EU MRV,” says Bishnoi. “Initially, the offshore industry will only be under MRV until 2027. The inclusion of offshore and general cargo vessels between 400 and 5,000 gross tonnage in EU ETS depends upon review of EU ETS regulation in 2027. There is no surrendering of allowances yet.”

Changing allowances

The EU allowances under EU ETS will be calculated at fleet level rather than individual vessels, with the scope of emissions gradually increasing so that 100% of emissions will be chargeable by 2026.

At the moment these stand at around €69 per ton of CO₂, says Bishnoi. EU allowances will be surrendered to the administering authority – which has been decided based on the vessels’ flags and number of port calls in that member’s state.

As it is a trading scheme, under the ETS, shipping companies can already start buying allowances to sell later on, even to other industries.

The money collected through penalties and allowances, while being borne by the customer, who ultimately bears the brunt of the resulting rising costs, could be used in greener technologies and research and development required to bolster port infrastructure to allow for renewable shorepower, for example.

“If there are port facilities equipped with onshore power supply, that power is renewable – so when a ship goes there and is connected to a renewable energy source, it will reduce some emissions,” says Bishnoi.

“And it will be easier to make the smaller vessels greener by using batteries, and connecting them to onshore power supply. All the implementation of greener technology starts with these smaller ships and vessels.

“It’s a transition. Such regulations will force them to utilise greener technologies.”