MEMBER ALERT Shipowners Claims Bureau, Inc., Manager One Battery Park Plaza 31 st Fl., New York, NY 10004 USA Tel: +1 212 847 4500 Fax: +1 212 847 4599 https://www.american-club.com American Club Member Alert – November 6, 2023 1 NOVEMBER 6, 2023 THE EUROPEAN UNION (EU) EMISSIONS TRADING SYSTEM (ETS): MONITORING, REPORTING AND VERIFICATION (MRV) REQUIREMENTS As of January 1, 2024, the EU ETS monitoring, reporting and verification (MRV) requirements are due to take effect for cargo and passenger ships of 5,000 GT or more that are calling at, or departing from, ports in the European Economic Area (EEA). As of January 1, 2025, the requirements will be expanded to apply to cargo ships and offshore ships of 400 GT and above. T he EU EST MRV requirements target emissions of carbon dioxide (CO 2 ), methane (CH 4 ) and nitrous oxide (N 2 O). One hundred per cent (100%) of emissions on voyages and port calls within the EU/EEA and fifty per cent (50%) of emissions on voyages into, or out of, the EU/EEA are subject to the EU ETS requirements. T hese requirements are relevant to companies that have assumed the shipowner’s responsibility for the ship as set forth in the International Safety Management (ISM) Code as the holder of the Document of Compliance (DoC) and are the parties responsible for reporting emissions. Companies will be required to hold sufficient EU Allowance (EUA) credits for vessels under their control and surrender the allowance credits to the administering authorities annually beginning in September 2025. W hat is the administering authority? The responsible administering authority is the authority in the EU or EEA Member State to whom the company is obliged to surrender the allowances corresponding to the emissions to be reported from the preceding calendar year. For companies registered within the EU/EEA, it is the Member State where the company is registered. For companies registered outside the EU/EEA, it is the Member State with the largest number of port calls during the prior twoyear period. For vessels that have not traded within the EU/EEA within the last two years, the Member State will be that of the first port of call within the EU/EEA. M onitoring requirements The following deadlines apply to emissions monitoring: •By December 31, 2023 or the earliest possible date by March 31, 2024. Companies should submit their emission monitoring plans (MPs) for each ship through the Europea n Ma ritime Safety Administration’s (EMSA’s) web-based platform for reporting, THETISMRV. The THETIS-MRV is accessible to shipowners or ship operators, the verifying bodies (primarily the vessel’s classification society), relevant ships’ flag States and relevant EEA Member State authorities. MEMBER ALERT Shipowners Claims Bureau, Inc., Manager One Battery Park Plaza 31 st Fl., New York, NY 10004 USA Tel: +1 212 847 4500 Fax: +1 212 847 4599 https://www.american-club.com American Club Member Alert – Novem ber 6, 2023 2 • By April 1, 2024. For each ship, companies must submit to their responsible administering authority an MP that has been assessed by the verifying body. • By June 6, 2025. The responsible administering authority shall approve the MP based upon the results of the assessment of the verifying body. Ships having not been subject to current MRV requirements, are required to submit an MP to their administering authority within three months of the first call to an EU/EEA port. The MP shall be approved by the administering authority wit