Working together

for a safer world

European Union Regulation on Monitoring,

Reporting and Verification of Carbon Dioxide
from Ships
A Lloyds Register Summary

Executive Summary
European Union (EU) regulation 2015/757 on the monitoring, reporting and verification (MRV) of carbon dioxide (CO 2)
emissions from maritime transport has been adopted by the European Council (EC) and Parliament and will enter into
st
force on 1 July 2015.
rd

This has been introduced further to the EUs Climate and Energy Package, adopted on 23 April 2009, which seeks
international agreement including emission reduction targets through the IMO or the United Nations Framework
Convention on Climate Change (UNFCCC).
The regulation covers shipboard carbon dioxide (CO2) emissions but not other greenhouse gas emissions, it also
includes requirements for monitoring data on cargo carried and transport work.
The regulation applies to certain vessels of all flags conducting voyages into, out of and between EU ports and will
require annual reporting of their CO2 emissions in line with an approved monitoring plan. The purpose of the
regulation is ultimately to provide reliable information on CO2 emissions within the maritime transport sector.
As a first step the regulation is intended to quantify CO2 emissions, which will then allow the EU to define reduction
targets and finally the means to achieve those targets, as appropriate.

The MRV Regulation

What is MRV?
MRV is a standardised method to produce an accurate CO2 emissions inventory, through the quantification of CO2
emissions. The key principles of the scheme are to generate robust results using a lean approach considering
parameters which are already monitored during normal operations.

Why is this being implemented?

In 2010, the UNFCCC recognised that global warming must not exceed pre-industrial levels by more than 2 degrees
centigrade and that, in order to ensure this, GHG emissions would need to be reduced to 50% less than 1990 levels by
2050.
As shown in Figure 1, maritime transport is currently the only industry sector not addressed either through the EU
Emissions Trading Scheme (ETS) or the EUs Effort Sharing Decision on CO 2, but represents 4% of total emissions and is
recognised as the fastest growing sector in transportation.

Lloyds Register Summary EU MRV

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Lloyds Register Summary EU MRV

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Figure 1. Current regulations governing EU CO2 emissions

How will it be implemented?

Following stakeholder consultation, the EU agreed that any plan to reduce shipping CO2 emissions in the long term
would have to be based on representative, accurate data. As such the EU plan of action is a phased approach to
regulating CO2, as follows:
Phase 1 Implement the MRV scheme to establish the nature and quantity of CO2 emissions from maritime transport.
Phase 2 Establish an agreed global energy efficiency standard as part of the regulation.
Phase 3 Identify whether the efficiency standards are achieving the EUs desired absolute CO2 emissions reductions
and determine what else should be done, e.g. introduction of a Market Based Measure (MBM).

How does it apply?

Irrespective of flag, the regulation applies to ships greater than 5,000 GT (with some exceptions) undertaking one or
more voyages into, out of and between EU ports. It requires per-voyage and yearly monitoring of CO2 emissions, as
well as other parameters including energy efficiency metrics and quantities of cargo carried.
The exceptions are warships, naval auxiliaries, fish catching or processing ships, wooden ships of a primitive build, ships
not propelled by mechanical means and government ships used for non-commercial purposes.
Annually, Companies (DOC holders) must provide an emissions report for the previous calendar years activity. In
addition, this will include the technical efficiency of the ship (the Energy Efficiency Design Index (EEDI) or the Estimated
Index Value (EIV) in accordance with IMO Resolution MEPC.231(65), where applicable).
Ships are exempted from the obligation to monitor this information on a per-voyage basis if they undertake more than
300 voyages within the reporting period, or if all their voyages during the period either start or end at a port under the
jurisdiction of an EU member state.

When does reporting occur?

Reporting periods are defined as a calendar year. For voyages starting and ending in two different calendar years, the
monitoring and reporting data is to be accounted under the first calendar year.
To simplify the preparation of monitoring plans and reporting requirements, electronic templates will be provided by
the European Commission (EC). The following timescales have been set as part of the regulation:

Lloyds Register Summary EU MRV

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Preparation and adoption of supporting technical legislation in 2015/2016 including broad stakeholder and
expert involvement
Accreditation of verifiers in 2017
st
31 August 2017 Monitoring plan to be prepared and submitted for approval by an accredited verifier
st
1 January 2018 Commence per-voyage and annual monitoring
th
2019 onwards By 30 April each year, submit a verified emission report to the EC and relevant flag state
th
30 June 2019 onwards Ships will need to carry a valid document of compliance relating to the relevant
reporting period.
th
30 June each year the EC will make each ships emissions reports publicly available including information
specific to that ship, its fuel consumption, CO2 emissions, technical efficiency (EEDI or EIV as appropriate) along
with other parameters.
The schedule for implementation of the requirements, up to and including the completion of the first reporting period
is outlined in Figure 2.

Figure 2. MRV schedule of implementation

How will it work?

Each company will be required to produce a monitoring plan which will be used to monitor data on a per-voyage basis.
This data will be aggregated annually and reported for all voyages conducted into, out of and between EU ports. The
differing requirements for monitoring and reporting on a per-voyage basis and on a yearly basis are shown in Table 1,
and the overall MRV scheme is outlined at Figure 3.
Per-Voyage
Monitoring
Port of departure and
port of arrival including
the date and hour of
departure and arrival

Annual reporting
Aggregated annual CO2 emissions
from all voyages between, from
and to ports under a Member
State's jurisdiction during the
reporting period
CO2 emissions which occurred
within ports under a Member State's
jurisdiction whilst at berth
Details of the method used for
emissions monitoring
Technical efficiency of the ship (EEDI
or EIV as applicable)
Vessel identification
Total annual amount/weight of cargo
carried
Annual average efficiency (e.g. EEOI,
fuel consumption per distance and
cargo carried)

Lloyds Register Summary EU MRV

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Total annual fuel consumption

Amount and emission factor for each type of fuel consumed in
total
CO2 emitted
Total CO2 emitted
Distance travelled

Total distance travelled

Time spent at sea

Total time spent at sea and at berth

Verification information

Table 1. MRV monitoring requirements

With respect to annual data disclosure, in specific circumstances where disclosure of data would exceptionally
undermine the commercial interests that deserve specific protection, companies may request that data is aggregated in
such a way as to protect that interest. If that protection is not possible, the EC will not publish the information. The
annual publication represents a balance between transparency and confidentiality.

Bunker
Delivery
Note

Tank
Sounding
Monitoring
Plan
Flow
Meters
Emission
Measurement

Annual
Emission
Report

Central
database

Verification

Figure 3. MRV scheme overview

How do we monitor CO2?

Monitoring of CO2 will include emission sources on board such as main engines, auxiliary engines, gas turbines, boilers
and inert gas generators, but the precise scope of these sources has not yet been specified. We understand that the EC
may provide a more prescriptive list in technical guidance that will follow the implementation of the regulation.
CO2 emissions will be either calculated based on fuel consumption and use of appropriate emissions factors for the fuel
type being consumed, or by direct emissions monitoring, with a back-calculation of the fuel consumption using the
relevant emissions factor. As part of the monitoring plan, companies will be able to choose one or more of four
methods for monitoring fuel consumption in each combustion source being monitored:
The use of Bunker Fuel Delivery Notes and periodic stocktakes of fuel tanks (except for those vessels where cargo is
used as fuel);
Bunker fuel tank monitoring;
Flow meters for applicable combustion processes; or
Direct emission measurements.

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Where using a combination of these methods would improve the accuracy of the CO 2 emission measurement for a
given combustion source, it is also permitted.
These methods are goal-based. Where fuel consumption is measured in units of volume, the density of that fuel also
needs to be determined, either through the bunker delivery note or on-board measurement systems according to the
regulation. Where used, the density from a companys independent fuel analysis can be taken instead.
Lloyds Register notes however, that presently there is no legal requirement for a user to determine quality and makeup of fuel and in this regard, options for introducing standard values of density or owner-supplied values which have
been verified and independently tested need to be developed.
The regulation takes into account existing monitoring and reporting principles used on-board ships in order to minimise
administrative burden for the ship owner or operator. It also facilitates the use of new methods and technologies that
might further reduce the burden on the owner/operator.

Where does energy efficiency come in?

Lloyds Register understands it is the EUs intention to seek absolute emissions reductions from maritime transport, as
stated in their Climate and Energy Package. Whilst the regulation on MRV is intended as a means to establish the CO2
emissions from shipping relating to EU waters, an energy efficiency measure will be implemented within the regulation
as a means to support long term reductions in CO2 on a per-ship basis.
In this regard, it is the ECs intention to identify whether the energy efficiency measure(s) alone achieve the desired
absolute emissions reductions for maritime transport overall or whether further measures will be required.
The MRV regulation refers to energy efficiency as part of the monitoring and reporting requirements, including
transport efficiency and average energy efficiency. These are defined within the Annex II to the regulation and have
similarities to the methodology for calculating the IMOs Energy Efficiency Operational Indicator (EEOI). Through
discussion with the EC, however Annex II is intended as a placeholder and a preference is for a globally agreed energy
efficiency measure(s).

How will it be verified?

Tasks related to the check of monitoring plans, emission reports, communication with ship owners and operators and
the issuance of documents of compliance will be ensured by accredited third party verifiers which may include
classification societies such as Lloyds Register. The regulation sets out guidance on the requirements for verification
but, in general, the steps relating to verification are summarised as follows:
Verifying conformity of the monitoring plan against the requirements laid out in the regulation;
Verifying conformity of the emission report with the requirements laid out in the regulation and issuance of
verification report;
Ensure that emissions and other climate-related data have been determined in accordance with the monitoring plan;
Determining and making recommendations for improvement to the monitoring plan.
Upon satisfactory verification of the emission report, the verifier will then issue a document of compliance to the
company.
The regulation will not be a flag State requirement; instead it will be enforced through Port State Control within
European ports. For this reason the regulation includes an amendment to Directive 2009/16/EC of the European
Parliament and of the Council on Port State Control.

Further developments
The regulation contains room to adopt specific details relating to it, through delegated acts. This means EU will be able
to incorporate additional details without requiring adoption by the European Parliament and European Council.

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International dimension of the EU MRV Regulation

CO2 emissions are an issue of global concern. The IMO is in the process of developing its strategy to address ship borne
CO2 emissions. There is particular concern in the shipping industry that the EU MRV regulation may conflict with
potential future IMO regulations, however:
Discussions are currently underway at the IMO for further operational and technical measures for energy efficiency
from ships. This includes a data collection system for the fuel consumption of ships. Full text has been developed for
a data collection scheme for either voluntary or mandatory application
Under the EU scheme monitoring does not start until 2018, therefore the IMO could agree a global data collection
scheme before the EU system is implemented on the ground
In the event of agreement on a global scheme there will be an adjustment of the EU MRV regulation in accordance
with the review clause to avoid double reporting

How is Lloyds Register involved?

Lloyds Register is actively involved in dialogue, both directly and indirectly, with the EU through the ECs DirectorateGeneral on Climate Action, DG CLIMA. Our technical feedback on the regulation has already helped to influence
aspects of its development and we are keen to ensure that this continues throughout the finalisation, implementation
and further development phases in order to ensure it will provide a fair, practical and robust regulation with minimum
additional administrative burden to ship owners and operators.
For further information or enquiries in regard to this subject, please visit our website:
http://www.lr.org/co2measurement
You can also contact us at:
Environment & Sustainability
Lloyds Register EMEA
Lloyds Register Global Technology Centre
Southampton Boldrewood Innovation Campus
Burgess Road
Southampton
SO16 7QF, UK
E marine-environment@lr.org

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