Explanatory Memorandum to COM(2019)38 - Amendment of Regulation (EU) 2015/757 in order to take appropriate account of the global data collection system for ship fuel oil consumption data - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2019)38 - Amendment of Regulation (EU) 2015/757 in order to take appropriate account of the global data collection system for ship fuel ... |
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| source | COM(2019)38  |
| date | 04-02-2019 |
1. CONTEXT OF THE PROPOSAL
- Reasons for and objectives of the proposal
Climate change is a major challenge that needs to be tackled urgently. This is why the Paris Agreement aims to limit global temperature increase well below 2°C compared to pre-industrial levels, and pursue efforts to limit the temperature increase to 1,5°C based on significant greenhouse gases (GHG) emission reductions from all countries.
Due to the considerable consumption of fossil fuels, global shipping activity emits significant amounts of GHG emissions and contributes to climate change. GHG emissions from international maritime transport are estimated to be around 2-3 percent of total global GHG emissions. This is more than the emissions of any EU state. If the shipping sector were a country, it would rank sixth in emission in the world. The impact of the sector at EU level is equally considerable: in 2015, it was 13% of the overall EU greenhouse gas emissions from the transport sector1. However, maritime transport is the only sector not expressly addressed by an EU emission reduction objective or specific mitigation measures.
In the future, seaborne trade volumes are likely to grow, which will lead to a significant increase of associated GHG emissions if mitigation measures are not put in place swiftly. According to a study2 from the International Maritime Organisation (IMO), depending on future economic and energy developments, global shipping emissions could grow between 50% and 250% by 2050. At the EU level, CO2 emissions from maritime transport increased by 48% between 1990 and 2008, and are expected to increase by 86% above 1990 levels by 2050 despite the adoption of minimum ship efficiency standards for new ships by the IMO in 20113. If nothing is done to tackle these emissions, this risks undermining the goals of the Paris Agreement and the efforts deployed by other sectors.
Following up on the 2011 EU White paper on transport, the EU adopted a strategy in 2013 for progressively integrating maritime emissions into the EU's policy for reducing greenhouse gas emissions4. As a first step, the European Parliament and the Council adopted in April 2015 the Regulation (EU) 2015/7575 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport (the “EU MRV Regulation”), which was completed in 2016 with two Delegated6 and two Implementing Regulations7. The EU MRV Regulation was developed with a view to:
- Collect robust and verified CO2 emission data for all ships (above 5000 gross tonnage) calling at European Economic Area (EEA) ports, including CO2 emissions from these ships in ports;
- Provide robust information to support future policy-making decisions and implementation of policy tools, as well as allow for the implementation of international objectives or measures (e.g. on energy efficiency);
- Provide the necessary transparency concerning data to stimulate the up-take of new technologies and operational measures to make ships greener.
According to the EU MRV Regulation, shipping companies have to report their annual CO2 emissions and other relevant information arising from their ships’ voyages to and from EEA ports, and within EEA ports. The obligations for shipping companies started in 2017 with the preparation and submission to accredited verifiers of monitoring plans. The monitoring of fuel consumption, CO2 emissions and energy efficiency started in 2018 and the first emissions reports are due in April 2019.
In 2016, following the entry into force of the Paris Agreement and the adoption of the EU MRV Regulation, the IMO Marine Environment Protection Committee (MEPC) adopted amendments to the MARPOL Convention establishing the legal framework for a global data collection system for fuel oil consumption of ships (“global IMO DCS”). Details and implementing modalities of the global IMO DCS were agreed later on through 'guidelines' adopted by MEPC 70 in October 2016 and by MEPC 71 in July 2017. Under the global IMO DCS, monitoring obligations start in 2019, with reporting in 2020.
As a result, from January 2019 ships performing EEA-related maritime transport activities will have to fulfil monitoring and reporting requirements under both the EU MRV Regulation and the global IMO DCS.
The co-existence of these two monitoring, reporting and verification systems at the EU and global level was anticipated in the EU MRV Regulation. Article 22 of this Regulation says: "In the event that an international agreement on a global monitoring, reporting and verification system for greenhouse gas emissions (…) is reached, the Commission shall review this Regulation and shall, if appropriate, propose amendments to this Regulation in order to ensure alignment with that international agreement."
The main objective of this proposal is therefore to amend the EU MRV Regulation in order to take appropriate account of the new global IMO DCS, with a view to allow for streamlining and reducing administrative effort for companies and administrations as possible, while preserving the objectives of the EU MRV Regulation.
- Consistency with existing policy provisions in the policy area
The proposed changes to the EU MRV Regulation are consistent with existing policy provisions in the area as they should not undermine the key objectives pursued by the EU MRV system and more generally, they are consistent with EU climate policy. In particular, the proposal aims to preserve the projected positive impact of the EU MRV Regulation in terms of gathering robust and verified data, informing future policy-making decisions and incentivising the up-take of energy efficiency measures and behaviours in shipping.
In addition, this proposal pursues the approach laid down in the other EU emissions reductions policies where the monitoring, reporting and verification of greenhouse gas emissions plays a fundamental role to ensure the effective implementation of EU climate policies, such as under the greenhouse gas emission allowance trading system. The proposal is consistent with the transparency provisions under the EU ETS, including verification by third parties.
- Consistency with other Union policies
The EU submitted the Nationally Determined Contribution ('NDC') of the EU and its Member States to the UNFCCC in March 2015, committing to a binding target of at least a 40 % domestic reduction in economy-wide GHG emissions by 2030 below 1990 levels, in line with the 2030 climate and energy policy framework approved by the October 2014 European Council and since adopted into law8. All sectors need to contribute to the low-carbon transition and to the Paris agreement.
The proposal is consistent with the strategy on low emissions mobility, which addresses actions to further reduce GHG emissions in transport, as part of broader decarbonisation efforts undertaken and committed by the EU, including for the 2030 horizon9.
By providing robust information on CO2 emissions from individual ships, the EU MRV Regulation is key to facilitate future decision making at Union level and to govern possible future climate policies in this sector. The proposal safeguards this key principle. The EU MRV Regulation as an existing EU policy instrument is a first step in the right direction to be used as a basis for further policy development.
The proposal is also consistent with the “energy efficient first” principle of the Energy Union, as it should enhance the implementation of energy efficiency measures in the shipping sector.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
- Legal basis
Articles 191 to 193 of the Treaty on the Functioning of the European Union (TFEU) confirm and specify EU competences in the area of climate change. The legal basis for this proposal is Article 192 TFEU.
- Subsidiarity (for non-exclusive competence)
In accordance with the principle of subsidiarity set out in Article 5 of the Treaty on European Union, the objectives of this proposal can only be achieved through a proposal from the Commission at EU level as the proposal intends to amend existing EU legislation.
Collecting and publishing data of ships' emissions and energy efficiency at EU level has the advantage that the results are fully comparable as based on a single set of requirements. This contributes better to the removal of market barriers due to lack of information.
- Proportionality
The proposal complies with the proportionality principle because it does not go beyond what is necessary in order to achieve the objectives of the EU MRV Regulation, while at the same time ensuring the proper functioning of the internal market and the European shipping industry's competitiveness.
- Choice of the instrument
This proposal for an amending Regulation follows on the fact that the proposal is to amend the existing EU MRV Regulation.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
- Ex-post evaluations/fitness checks of existing legislation
It is relevant to note that the review of the EU MRV Regulation is carried out without prior evaluation as this would only have been possible towards the end of 2019, after the completion of the first compliance cycle. Therefore, an evaluation of the existing EU MRV Regulation was not part of the preparatory work and has not fed into the assessment of the policy options.
- Stakeholder consultations
The proposed modifications to the EU MRV Regulation are widely in line with the interests expressed by stakeholders on their replies to the online public consultation and the targeted e-survey. Civil society organisations, national accreditation bodies, research institutions and citizens/individuals widely support that some important objectives need to be preserved when amending the EU MRV Regulation. These include raising awareness on emission reduction, providing robust information to market players on fuel consumption and energy efficiency and collecting data for an informed policy making. For the shipping sector, the main priority is, however, reducing administrative burden. EEA Member States and EU MRV verifiers widely support these objectives too, notably the collection of reliable data to develop future policies and minimising administrative effort.
- Collection and use of expertise
Emission projections studies rely on relevant data from the IMO 3rd GHG study10 and have been taken into account, notably in relation to emissions and emission forecasts for international shipping, as well as the emissions reduction potential arising from technical and operational measures of international shipping.
- Staff Working Document - impact assessment
An impact assessment has been developed to analyse which features of the EU MRV Regulation might be aligned with the global IMO DCS ones. This document complements the impact assessment that accompanied the proposal in 2013, which included an estimation of the costs associated with the EU MRV Regulation. In addition, the new Staff Working Document containing this impact assessment builds on the inception impact assessment published in June 2017 and the public consultation concluded in December 2017.
The Regulatory Scrutiny Board of the European Commission assessed a draft version of the impact assessment and issued a positive opinion on 13 July 2018. The Board made recommendations to further improve the report, which are addressed in the revised report. The Executive Summary of the impact assessment and the opinion of the Regulatory Scrutiny Board are on the Commission’s website11.
Considering the need to preserve the key objectives of the EU MRV Regulation, two alignment candidates were discarded upfront: governance and CO2 reporting. Aligning the governance was not considered to be an option as it would entail that the EU and its Member States can only collect data concerning emissions from EU-flagged ships, leaving aside the GHG emissions emitted by non EU-flagged ships as part of voyages involving EEA ports. In addition, aligning on CO2 reporting would mean that ships would not report CO2 emissions data. This would be fully inconsistent with the very objective of the EU MRV Regulation, which is related to the CO2 emissions performance of ships and their climate impact.
Contents
- Bearing in mind these limitations, three policy options have been assessed in the impact assessment:
- The comparison of the three options led to the following conclusions:
- Therefore, it is proposed to make the following amendments:
- On the other hand, some relevant features of the EU MRV Regulation should be maintained. They are as follows:
Bearing in mind these limitations, three policy options have been assessed in the impact assessment:
Option 1 - Baseline Scenario
This option reflects what would happen if no action is taken.
Option 2 – Streamlining
Under this scenario, different alignment options were assessed, in terms of: scope, definitions, monitoring parameters, monitoring plans and templates, verification and transparency.
Option 3 - High Convergence
Under this option, the EU MRV Regulation would be amended to harmonise all its technical aspects with the global IMO DCS, at the risk of undermining its expected market impact.
Aligning the definitions, the monitoring parameters and the monitoring plans and templates as appropriate contributes to reducing the administrative burden for shipping companies and national authorities, facilitating compliance with the reporting obligations under the two systems.
At the same time, this does not jeopardise the objectives pursued by the current EU MRV Regulation and its projected positive impacts.
Conversely, aligning aspects such as scope, verification and transparency would severely affect the objectives pursued by the EU MRV Regulation, while not necessarily contributing to the significant reduction of the administrative burden. If there were an alignment on transparency, the benefit of having energy efficiency data available at ship level to incentivise the uptake of such measures would be lost. Aligning verification requirements would mean giving up the homogeneous and independent third party verification system. Finally, an alignment on scope would lead to incomplete information on the EEA related emissions.
Consequently, Option 2 (Streamlining) is the preferred option, and elements such as definitions, the monitoring parameters and the monitoring plans and templates are proposed to be aligned as appropriate.
- Regulatory fitness and simplification
The proposed streamlining approach would reduce the compliance efforts compared to a business as usual scenario. As explained above, it would contribute to the reduction of the administrative burden for shipping companies and facilitate compliance with the reporting obligations under the two monitoring, reporting and verification systems. In this context, the proposed review of the EU MRV Regulation is assumed to cover the needs for REFIT requiring exploring the potential for simplification and improving the efficiency of the EU legislation.
- Fundamental rights
The proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. More specifically, it contributes to the objective of a high level of environmental protection in accordance with the principle of sustainable development as laid down in Article 37 of the Charter of Fundamental Rights of the European Union.
4. BUDGETARY IMPLICATIONS
The proposal has no implication for the Union budget.
5. OTHER ELEMENTS TO BE DEVELOPPED
- Detailed explanation of the specific provisions of the proposal
In response to the progress achieved by the Maritime Environmental Protection Committee (MEPC) at its meetings in October 2016 and in July 2017 when adopting relevant guidelines for the global IMO DCS, the Commission has undertaken the analysis under Article 22 of the EU MRV Regulation.
This proposal aims at reducing the administrative burden for ships performing maritime transport activities that are covered by both the EU MRV Regulation and the global IMO DCS while preserving the specific objectives of the EU action in this area.
1. Definitions of 'company' and 'reporting period' and also the attribution of monitoring and reporting obligations in case of 'changes of company' are to take into account the global IMO DCS parallel provisions. This will ensure that the same legal entities monitor and report according to similarly calculated reporting periods for their ships performing EEA-related maritime transport activities under the EU MRV Regulation and under the global IMO DCS. In order to do so, Article 3 and 11(2) of the EU MRV Regulation will be amended.
2. Global IMO DCS provisions on data to be monitored and reported annually should be taken into account so as to ensure that streamlined data is collected for ships' activities falling under both systems. In order to do so, 'deadweight tonnage' should be defined and reported as a compulsory parameter while 'cargo carried' is kept as a voluntary monitoring parameter for those companies willing to provide a calculation of their ships' average energy efficiency based on cargo carried. EU Shipping current parameter 'time at sea' should be replaced by the global IMO DCS definition of “hours underway". Finally, calculation of “distance travelled” should take as a basis the options retained under relevant IMO DCS guidelines. In order to do so, Articles 6(3), 9(1), 10, 11(3), 21(2) and Annex II, letter A(1) of the EU MRV Regulation will be amended.
3. Minimum content of monitoring plans should be streamlined so as to take into consideration IMO "Guidelines for the development of a Ship Energy Efficiency Management Plan (SEEMP)” except for those provisions which are necessary to ensure that only EU-related data are monitored and reported under the EU MRV Regulation. In order to do so, Article 6(3) of the Regulation will be amended.
On the other hand, some relevant features of the EU MRV Regulation should be maintained. They are as follows:
1. Scope in terms of ships and activities covered under the EU MRV Regulation will be maintained (thus covering the majority of ships above 5000 GT calling at EU ports for maritime transport purposes). Ship activities that are not considered maritime transport such as dredging, laying pipelines and supporting offshore installation activities continue not to be subject to monitoring and reporting requirements.
2. Ships' CO2 emissions within Union ports are also to be monitored and reported separately, so as to incentivise the use of available measures for reduction of CO2 emissions within EU ports and to bring further awareness of shipping emissions. Also data on voyages internal to any EU Member State is to be monitored and reported so as to enable Member States authorities to have robust and comparable data of their national shipping emissions. Current MRV provisions on verification of data by accredited third parties are to be kept so as to preserve the EU objective of providing comparable over time and robust information for further decision making at the EU or at the global level.
3. The EU MRV Regulation provisions on publication of individual ships' data of CO2 emissions and energy efficiency is also to be kept to help remove market barriers hampering the uptake of more energy efficient technologies and behaviours in the sector.