Helen Barden and Mark Smith from NorthStandard answer questions arising from the first months of Europe’s Emissions Trading System being applied to shipping. Several issues were left unanswered as the European Union’s Emissions Trading System (EU ETS) was applied to shipping from the beginning of this year, but answers to those questions are becoming apparent. The European Commission issued a set of EU ETS implementing regulations in October and November 2023, with a further implementing decision published in January 2024. However, they have not provided all the answers. Some owners and operators have planned and are better prepared for shipping’s inclusion in the EU ETS. However, there remains confusion in some areas and NorthStandard has sought clarification on these to guide its members. The Commission Implementing Regulation (EU) 2023/2599 has provided clarification on who is the “Shipping Company” under the EU ETS. Without a written mandate (adhering to the requirements of the implementing legislation) between the shipowner and other entity, such as the bareboat charterer or management company, the ETS obligations will remain with the shipowner. But who is the shipowner? In the FAQs on the European Commission’s website, it states that the shipowner is the registered owner of the ship. In line with the European Commission NorthStandard interprets the implementing regulation to state that a shipowner could mandate its obligations to the ISM company and no one else. Therefore, a bareboat charterer would need to be the ISM company and agree to be mandated to take on ETS obligations if a shipowner wanted to pass ETS obligations on to its bareboat charterer. If the ship manager is the ISM company as part of a chain with the registered owner and bareboat charterer and doesn’t want to take on ETS obligations, these will stay with the registered owner. It is, however, possible for a ship manager or bareboat charterer to help an owner with the operational side of compliance, even if they don’t want to be the entity ultimately responsible for compliance with the EU ETS. Thetis MRV, MOHAs and monitoring A third party, such as a ship manager, could be given access to the Thetis MRV system and provide monitoring and reporting tasks on the shipping company’s behalf. In addition, a third party should be able to have access to a shipping company’s maritime operator holding account (MOHA), although specific requirements should be checked with the relevant registry. Some shipping companies will already have opened their MOHA, and now more will be able to do so as Implementing Decision 2024/411 has been published listing each shipping company and its designated administering authority. It should be noted, however, that there may be shipping companies not on the list, but which will have to comply with the EU ETS. Indeed recital (6) of the Implementing Decision makes the point that because the inclusion of a shipping company into the EU ETS is dependent upon a vessel in its fleet undertaking a voyage caught by the EU ETS, a shipping company’s obligation to comply with the EU ETS is not dependent upon its being included in the list. The MRV data must be properly verified by 31 March of the following year and the required allowances surrendered by 30 September of that year. So, for 2024 data, the relevant dates will be 31 March 2025 and 30 September 2025 respectively. Voyage of discovery Contractual questions about the responsibility of EU ETS compliance