EU-ETS for Shipping
ClassNK EU-ETS Seminar
11 October 2023
Marine GHG Certification Department
ClassNKⒸ 2023 NIPPON KAIJI KYOKAI

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Overview of EU-ETS for shipping: Background Fit for 55 (Comprehensive climate policy package) December 2019： European Green Deal by European Commission (EC) EU’s 2030 Climate Target:
Reduce net GHG emissions by at least 55% by 2030, compared to 1990 levels.
 July 2021： Fit for 55 by EC
 A comprehensive climate policy package to achieve EU’s 2030 Climate Target< Proposals to affect the shipping sector in Fit for 55 >• Extension of Emissions Trading System (EU-ETS) to the shipping sector
Apply from 1 January 2024.

• FuelEU Maritime: Accelerate the use of low carbon fuels in shipping Limitation of lifecycle GHG intensity for fuel (2025~)
 Obligation to use on-shore power supply (2030~, containerships and passenger ships only)
Apply from 1 January 2025.
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Overview of EU-ETS for shipping: Background Visualization of emissions from ships/
timeline for implementation of regulations
Mid-term measures

IMO-DCS
2018

2019

CII
2023

EU-MRV2024

20252027

EU-ETS
FuelEU Maritime3Overview of EU-ETS for shipping: Scope of regulations
 Ships and Emissions in the scope Ships of 5,000GT and above CO2 emissions during EU-related voyages and while at berth in EU ports
Port A, B: EU/EEA Port
Port C : Non-EU/EEA Port

Port APort C

50% of CO2 emissions

100% ofCO2 emissions

EU/EEA

Non-EU/EEA
Port B••••

50% of CO2 emissions from voyages between
an EU/EEA port of call and a non-EU/EEA port of call
100% of CO2 emissions from voyages between EU/EEA ports of call
100% of CO2 emissions while at berth in EU/EEA ports of call

To be verified inaccordance with
EU-MRV regulations

European Union Allowances (EUA) that are equivalent to the annual CO2
emissions should be obtained for surrender4Overview of EU-ETS for shipping: Port of call
 “port of call” is the port where a ship stops to load or unload cargo, to embark or
disembark passengers, or where an offshore ship stops to relieve the crew.
 Stops for refuelling, obtaining supplies, dry-dock, etc. are excluded.
•The following calling at ports are NOT regarded as a “port of call” under the EU-ETS.
 Stops of containerships in EU’s neighbouring container transhipment ports:

 Located outside the EU but less than 300 nautical miles from a port of EU/EEA Member State； and Share of transhipment of containers (measured in TEU) exceeds 65% of the total container traffic ofthat port during the most recent 12-month period for which relevant data are available.

➡ The voyages preceding and following these ports are considered as consecutive voyages.
•A list of such container transhipment ports will be published by 31 December 2023.

According to the draft
EC document, thesetwo ports are listed.
TANGER MED(Morocco)
EAST PORT SAID(Egypt)5Overview of EU-ETS for shipping: Responsibility
 Responsibility: Shipping company•

Shipowner or any other organization or person who has assumed the responsibility for theoperation of the ship (ship management company or bareboat charterer etc.)
 Surrender the allowances equivalent to the annual CO2 emissions by 30 September of thesubsequent year.
 Surplus allowances can be carried over or sold.

•Each shipping company is registered to an administering authority of an EU/EEA Member State.
 Criteria for the registration：① A shipping company registered to an EU/EEA Member State:
The administering authority of the EU/EEA Member State in which the shipping company is registered to.
② A shipping company NOT registered to an EU/EEA Member State:(1) The administering authority of the EU/EEA Member State with the greatest estimated number ofport calls from voyages performed by that shipping company in the last 4 monitoring years.
(2) Without such voyage in the preceding 4 monitoring years, the administering authority of the EU/EEA
Member State that the concerning ship of the shipping company has arrived or started its first voyage.

 A list of the administering authorities for each shipping company will be published before
1 February 2024.
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Overview of EU-ETS for shipping: Penalty
 Penalty: Fines•

In breach of requirements to surrender sufficient allowances: Pay a fine of EUR 100 for each tonne of CO2 equivalent emitted for which theshipping company has not surrendered allowances.

＋The obligation to surrender allowances equal to those excess emissions in thefollowing calendar year.
 A shipping company that could not surrender sufficient allowance for 2 or moreconsecutive years , the ships of the company could be denied entering EU ports.

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Overview of EU-ETS for shipping: Phase-in Introduction of EU-ETS for shipping•

Phase-in period for first 2 years and fully covered from 2026’s emissions.
 Emissions in 2024： 40% of emissions in the scope (to be surrendered in 2025)
 Emissions in 2025： 70% of emissions in the scope (to be surrendered in 2026)
 Emissions in 2026： 100% of emissions in the scope (to be surrendered in 2027)•From 2026, N2O and CH4 will also be fallen in the scope of EU-ETS for shipping.

➡ From 2024, EU-MRV regulations will be amended to include N2O and CH4 as reporting items.

The detail ofmonitoring methods
to be announced by1 October 2023.

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Overview of EU-ETS for shipping: GHG gases
 How N2O and CH4 are calculated•

In Draft Delegated Regulation:
 Calculated by fuel oil
consumption multiplied by theemission factors N2O and CH4and their Global Warming
Potential, CH4:28, N2O:265
 For LNG, “methane slip” is also to
be considered in the calculation.

Draft delegated regulation

Global Warming Potential over 100 years

9EU-ETS & EU-MRV: Timeline for compliance Timeline for introduction of EU-ETS for shipping
2023

2024

2025
・・・ Purchase of allowances

Ship

1
CompanyA

Surrenderingof allowancesof company A

Ship(by 30 September)

2
Ship

3
Include the monitoring
methods for N2O andCH4 etc..

Verification

Submission to theAdministering
Authority

Preparing an aggregatedemissions data of company A
Submission to theAdministering Authority※To submit viaTHETIS-MRV(by 31 March)(by 1 April)

Submission to theAdministering Authority※(by 31 March)

Verificationof individualmonitoringplans

Verification of individualemissions reports（by 31 March）

Verification ofthe aggregated emissions
data of company A(by 1 April)(by 31 March)※The administering authority may require companies to submit their emissions reports by 28 February.

10ClassNK’s supports for EU-ETS for shipping Updates of ClassNK MRV-Portal•

The GHG emissions used in EU-ETS are verified in accordance with EU-MRV regulations.

•Support shipping companies’ preparation through ClassNK MRV-Portal in a timely manner: Updating the monitoring plan (After assessed by verifier, MP is to be submitted to THETIS) Preparing the aggregated emissions data at the company level Calculation of N2O and CH4 emissions (Expected to be calculated by fuel consumption)＜Current＞
ClassNK
MRV Portal
Voyagedata＜ClassNK’s supports＞
CO2ClassNK
MRV Portal

UpdateVoyage data

Verification

CO2N2O
CH4

Verification
Aggregatedemissions dataat the company level

Ship management company, etc.

Ship management company, etc.

11ClassNK’s supports for EU-ETS for shipping FAQs on the EU-ETS for Shipping (1st Edition) (March 2023)••

FAQs on the EU-ETSfor Shipping(1st Edition)

Q&A style explanation of the overview of the regulations and points to beaddressed in relation to the introduction of EU-ETS for shipping.
The FAQs will be updated as soon as new information becomes available.
FAQs on the EU-ETS for Shipping (1st Edition) Contents
Q1. What is the EU-ETS？
Q2. What is an overview of the EU-ETS for shipping?
Q3. How can I check the GHG emissions?
Q4. What is the “port of call” under the EU-ETS for shipping?
Q5. What should I do for the EU-ETS for shipping?
Q6. Who will purchase allowances under the EU-ETS for shipping?
Q7. When, where, and how can I purchase/surrender allowances?
Q8. What are the penalties for non-conformities?
Q9. How are the revenues from the EU-ETS for shipping used?
https://www.classnk.or.jp/hp/pdf/authentication/eumrv/EUETS_faq_e.pdf
12ClassNK’s supports for EU-ETS for shipping ClassNK Technical Information (May 2023)“Adoption of EU-ETS for shipping sector and amendments to EU-MRV”
https://www.classnk.or.jp/hp/pdf/tech_info/tech_img/T1299e.pdf

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FYI: FuelEU Maritime
 FAQs on the FuelEU Maritime (1st Edition) (August 2023)••

FAQs onthe FuelEU Maritime(1st Edition)

Q&A style explanation of the overview of the regulations and points to beaddressed in relation to the introduction of FuelEU Maritime.
The FAQs will be updated as soon as new information becomes available.
FAQs on the FuelEU Maritime (1st Edition) Contents
Q1.

What is the FuelEU Maritime？

Q2.

What is an overview of the GHG intensity regulations？

Q3.

How will the energy used and GHG intensity be confirmed?

Q4.

How to calculate GHG intensity when biofuels are used?

Q5.

What is the “port of call” under the FuelEU Maritime?

Q6.

What is Banking, Borrowing, Pooling?

Q7.

What should I do for the FuelEU Maritime?

Q8.

What is the FuelEU Monitoring Plan and the FuelEU Report？

Q9.

How is the penalty calculated for GHG intensity provisions?

Q10.

Who pays the penalties in FuelEU Maritime?

Q11.

What are the consequences of failing to pay a penalty?

Q12.

What is an overview of the use of on-shore power supply?

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FYI: FuelEU Maritime
 ClassNK Technical Information (October 2023)“Adoption of the FuelEU Maritime Regulation”
https://www.classnk.or.jp/hp/pdf/tech_info/tech_img/T1308e.pdf

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for your kind attention
Nippon Kaiji Kyokai (ClassNK)

Marine GHG Certification Department

TEL:+81-3-5226-3025
E-mail: dcs@classnk.or.jp