Frequently asked questions about the EU ETS

Compliance

What is the reporting period for the EU ETS?

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The regular EU ETS reporting period is a calendar year - from 1 January to 31 December. The company report can be a sum of individual vessels' data for the calendar year, but also partial year periods for vessels gone out of management or taken into management. The number of allowances to be surrendered needs to correspond only to emissions that occurred during the time of the particular company's responsibility for the vessels.

What about the voyages starting and ending in two different years? Which year will the emissions be allocated to?

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The regular EU ETS reporting period is a calendar year - from 1 January to 31 December. The company report can be a sum of individual vessels' data for the calendar year, but also partial year periods for vessels gone out of management or taken into management. The number of allowances to be surrendered needs to correspond only to emissions that occurred during the time of the particular company's responsibility for the vessels.

I have taken over a vessel this year. Am I liable to surrender the allowances for the period when the vessel was not under my management?

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In such a scenario, the voyage will be cut at the end of the year. For voyages starting and ending in two different years, the respective data is allocated to the year in which the emissions occurred. However, the vessel shall still report until the next cargo change so that the scope of such a voyage can be determined.

I have taken over a vessel this year. Am I liable to surrender the allowances for the period when the vessel was not under my management?

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The previous company's periodical emissions for a vessel will be a part of their aggregated emissions data on the company level next year. Therefore, your company will not be liable to surrender allowances for the period when the vessel was not under your management.

What is an administering authority? What is the process behind administering authority determination?

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The administering authority is the authority in an EU/EEA member state to which the company is obliged to surrender the allowances, corresponding to the emissions reported in the preceding calendar year.
For companies registered in the EEA, it is the member state where it is registered​.
For companies outside the EEA, it is the member state with the largest number of port calls over last 2 years​.
For vessels not trading in the EEA in the last 2 years, it is the member state of the first port call in the EEA.

How can I purchase EUAs?

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1. Auctions - EUAs can be purchased at a fixed price at auctions arranged several times a year by the European Energy Exchange (EEX) on behalf of the EU. Companies need to register with the European Commission to participate in these auctions.
2. Trading - EUAs can be bought and sold on the secondary market through brokers or online trading platforms. These can be traded on various exchanges and over-the-counter (OTC) markets, and the price fluctuates according to supply and demand.
3. Futures - It is possible to bank EUAs for use in future years. This can be useful if you expect to have higher emissions in the future and want to ensure you have sufficient allowances to offset those emissions. EUAs dated 1 January 2013 or later remain valid for meeting future surrender obligations, and EUAs issued on or after this date do not expire until they are surrendered.

Will there be a certificate that a certain number of allowances was purchased by the company? Who will issue such certificates?

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DNV assumes that all of these allowances will be certified on purchase and there will be no additional requirements on allowances certification. Later, these allowances will have to be submitted to the administering authorities, which will verify the quantity of EUAs (EU Allowances) and compare it to aggregated emissions.

What will be the deadline for MRV reports verification? Will it remain the same from 2025?

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From 2025, the deadline for a verified EU MRV Emission Report submission to the European Commission will be 31 March, instead of 30 April. After sucessful verification of the whole fleet MRV reports, the Company Emissions Report containing all the fleet's EU ETS scope emissions must be submitted to the administering authority by 31 March of each year. However, DNV recommends that you submit all the MRV Emission Reports for verification at least a month before the deadline in order to fulfil all the requirements in the due time.

How can I submit a Company Emissions Report at DNV? Will there be any new features in DNV's current MRV service?

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After a successful fleet verification, you will be able to submit a report containing of all of your vessels' emissions data for the preceding year. All the MRV partial reports for the vessels that left your fleet during the year will also be included in this summary. In case not all of the vessels' MRV Emission Reports are verified by DNV, these can be manually added to your Company Emissions Report. However, this will require providing verified data from another accredited verifier.

Will it be possible to monitor my EUAs in Emissions Insights or any other DNV tools?

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In Emissions Insights, it will be possible to monitor emissions within the EU ETS scope and estimate EU Allowances cost. Please keep in mind that this information will be based on submitted MRV data and will not be verified.

How do we know which ports are treated as transhipment ports? Where can I find a list of such ports?

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Transhipment ports are ports outside the EU/EEA, but less than 300 nautical miles from an EU/EEA port. The European Commission will provide a list of transhipment ports by 31 December 2023​.

How will emissions be calculated on voyages into the EEA/EU via a transhipment port?

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To avoid evasive behaviour, container ships stopping in the transhipment ports announced by the European Commission need to include 50% of the emissions for the voyage to that port as well, rather than only the short leg from the transhipment port.

When do we have to revise our Monitoring Plan? Will it be a completely new plan or it will be based on the current MRV Monitoring Plan?

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The new Monitoring Plan will be a revision of the existing plan covering additional information on new GHG and data aggregation. It has to submitted for verification to an accredited verifier between 1 October and the end of December 2023. Vessels shall start reporting accordingly from 1 January 2024. The verified Monitoring Plan has to be submitted to the administering authority by 1 April 2024.

Who will submit the verified Monitoring Plans to the administering authorities? What is the deadline for submission?

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It will be the responsibility of the company managing the vessel to submit the verified Monitoring Plan to the administering authority. The verified Monitoring Plan has to be submitted to the administering authority by 1 April 2024.

What are emission allowances? What is the deadline for surrendering these? To whom do I surrender allowances?

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EU Allowances (EUAs) are a type of carbon allowance that allows companies covered by the EU ETS to emit a certain amount of CO2. The necessary emission allowances are required to be surrendered to the administering authority by 30 September of each year. Failure to surrender allowances within the deadline for a single ship can affect compliance for an entire fleet. The shipping company is responsible for surrendering EUAs to achieve compliance with the EU ETS and thus bears the cost of these allowances. This is defined as the company that has assumed from the shipowner operational duties and responsibilities for the ship as specified in the ISM Code. This company is referred to as the Document of Compliance (DoC) holder, and is the same company that currently is responsible for reporting emissions through the EU MRV.

What if we do not fulfil the requirements? What is the penalty?

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Companies that fail to surrender allowances are liable to an excess emissions penalty of €100/tonne CO2 and are still liable for the surrendering of the required allowances. Companies that fail to comply for two or more consecutive periods may be denied entry to the EEA/EU for all ships under its responsibility.​

Does company reporting apply to all ships or only ships with EU voyages?

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The EU ETS applies only to vessels calling at EU/EEA ports for commercial reasons in the preceding reporting year. Only the ships with emissions on voyages into, within and out of EEA countries shall be included in the Company Emissions Report. It should also be noted that there are special derogations applicable in specific cases. These are described in the answer to the next question.

What are the derogations in the EU ETS scope?

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IA and IA Super ice-classed vessels – 5% fewer allowances to be submitted​.
Voyages between small islands of a member state below 200,000 inhabitans with no road link and a port of the same member state and related port activities – applies only to passenger ships / Ro-Pax​.
Voyages within the framework of a transnational public service obligation and related port stays – applies only to passenger ships / Ro-Pax​.
Voyages between the outermost region port of a member state and another port of the same member state and related port stays​.
Renewable fuels – yet to be confirmed through secondary legislation, including sustainability criteria for biomass.

What are the outermost regions?

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The European Union (EU) counts nine outermost regions, which are geographically very distant from the European continent. These are French Guiana, Guadeloupe, Martinique, Mayotte, Reunion Island and Saint-Martin (France), Azores and Madeira (Portugal), and the Canary Islands (Spain).​

Which voyages can be recognized as transnational public service and exempted from EU ETS?

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EU member states can request that a transnational public service contract or a transnational public service obligation between two member states should be temporarily exempted from certain obligations under the ETS Directive. The possibility should be limited to connections between a member state without a landborder with another member state and the geographically closest member state, such as the maritime connection between Cyprus and Greece.​

Will any special reporting be required at the end of the year due to change of reporting period?

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The EU ETS reporting is a calendar year - from 1 January to 31 December. Voyages with a departure in one year (X) and arrival in the next year (X+1) will have to be split into two events: one at the end of year X and another one at the start of year X+1. Consumed fuel ROBs must be reported in both events.

How can I prepare for CH4 and N2O reporting in particular?

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The inclusion of new greenhouse gas (CH4 and N2O) emission factors for fuel types is one of the main changes in the new Monitoring Plan. For most of the applicable ship types, these emission factors (together with the already existing CO2 emission factor) will be applied to the vessel's total consumption within the MRV scope and will result in an automatic calculation of all three greenhouse gases' emissions calculations in the DNV's database. However, LNG vessels will be required to report consumption per emission source to apply correct methane slippage corresponding to the applicable source class.

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