Lloyd’s Register has providedfurther guidance on the key steps that ship /ship /charterers are recommended to followahead of the entry into effect ofthe Emissions Trading Scheme (ETS) Directiveon 1 January 2024.
The guidance outlinesthe the key stepsto ensure the timely submission of the assessed Monitoring Plan (MP) and Emission Report (ER) to the Administering Authorities (AA), as well as surrendering of ETS allowances.
LR notes that /ship /charterers should agree upon the responsible entity for both ETS and MRV obligations and in place ahead of MP assessment by verifiers.
LR’s Class News 21/2023 outlines the key timeline of deadlinesassociated with these acts.
The requirements for MRV and ETS compliance start on 1 January 2024. MRV Monitoring Plans need to be updated and assessed by accredited verifiers, ahead of submission to Administering Authorities, by 1 April 2024.
While the implementing and delegated acts supporting the MRV Regulation and ETS Directive are expected to be published at the end of 2023 or beginning of 2024, action needs to be taken now.
Responsibility for compliance
The responsibility for ETS compliance lies with the ‘shipping company’, which under article 3(w) of Directive (EU /87)means “the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner”, including ISM compliance.
The responsibly for compliance with MRV can be either the “the shipowner or any other organisation or person, such as the manager or the bareboat charterer, which has assumed the responsibility for the operation of the ship from the shipowner”.
Responsibility for MRV and ETS compliance, including payment of ETS emissions allowances, must be contractually delegated to the same responsible entity. Shipowners may choose to maintain this responsibility or delegate it, however in the absence of a contractual mandate for compliance, responsibilitywill revert to the shipowner.
Key steps and recommendations
By end of 2023:
/ship /charterers should have agreed on the responsible entity for both ETS and MRV obligations. If a shipowner decides to delegate the responsibility, there must be a contractual arrangement in place that can be shared with the relevant verifiers and AA upon request.
LR Recommendation: Decisions on responsible entities for compliance with MRV and ETS should be decided now. The designated entity responsible for compliance should be the same for both ETS and MRV. Contracts specifying responsibility should be negotiated and in place ahead of MP assessment by verifiers.
From October 2023:
/ship /charterers must prepare the MP according to the Implementing Regulation MP Template. Shipowners and ship managers with ships that have a MP already in place must have it updated, adding in the newly required additional information.
LR Recommendation: The contractually designated party responsible for MRV and ETS compliance should look at the draft MP requirements now and start compiling the appropriate information based on the draft MP template.
By January 2024 (or when the official MP template is available):
/ship /charterers should send the ship’s MP to LR for assessment*. LR clients must submit this through Emissions Verifier, which allows the assessed MP to be exported via an .xml file and imported into THETIS-MRV.
LR Recommendation: To help ensure that assessment is complete ahead of the 1 April 2024 submission deadline, all information should be uploaded to Emissions Verifier no later than a month after the official publication of the MP template. Should document upload be made after this date, LR cannot guarantee that the MP assessment will be completed in time for the 1 April 2024 submission deadline to the AAs.
From January 2024 (or when the updated THETIS-MRV module is available):
/ship /charterers need to update ship MP information in the THETIS-MRV platform. The THETIS-MRV currently lacks additional fields for the updated MP requirements, but this expanded functionality is expected to be available in January 2024.
From January 2024:
/ship /charterers need to prepare and submit ship level emission reports to LR for verification. This should cover CO2 emissions only, as per the MRV requirements from Regulation EU /757as published in April 2015, based on data collected in 2023.
From 1 January to 31 December 2024:
At the ship level, ship owners and ship managers must start monitoring voyages, fuel consumption, emissions and, at the end of the first monitoring period, start preparing the ship Emissions Report (ER).
The full Class News 21/2023 can be foundhere.
