European Union: EU Proposes Further Measures Towards Reducing Greenhouse Gas Emissions From Ships

As a first step towards reducing the marine transport industry's greenhouse gas emissions, on 28 June 2013 the European Commission (the "Commission") tabled a draft Regulation to introduce a system of monitoring and publication of individual vessels' annual CO2 emissions.

This alert explains why the Commission has taken this step, exactly what it is proposing, who will be affected and what steps operators may wish to take in response.


According to a recent European Commission publication,1 the global shipping industry is responsible for around 1 billion tonnes of greenhouse gas (GHG) emissions annually, and around 4% of the EU's total emissions.

Tackling shipping emissions has been on the Commission's agenda for many years. This draft legislation was promised in a communication from the Commission in October 2012 and had been the subject of consultation earlier in 2012.

Despite efforts by the International Maritime Organisation (IMO) and the United Nations Framework Convention on Climate Change in recent years (including, for instance, the IMO's Energy Efficiency Design Index, which sets compulsory energy efficiency standards for new vessels2), the same publication anticipates that global maritime emissions will have more than doubled by 2050. This would be contrary to the internationally agreed objective of halving worldwide emissions from their 1990 levels by 2050, and the EU's more immediate commitment to reducing its GHG emissions to 20% of 1990 levels by 2020.3

Originally, it was intended that the EU would participate in a global solution for cutting marine transport emissions. Until now, the shipping sector has been the only form of transport not included in the EU's strategy for reducing GHG emissions. However, in the absence of an internationally agreed solution, the Commission has decided to implement its own strategy, in the hope that an EU scheme will pave the way for a unified global approach.

The EU has recently (from 2012), and very controversially, extended its flagship EU Emissions Trading Scheme (ETS) to cover the aviation sector. As has been widely publicised, attempts to apply that scheme to flights outside EU airspace ran aground in spectacular fashion, sparking litigation between the EU and U.S. airlines, a trade war with China and other nations and, eventually in late 2012, a dramatic climb-down by the EU as a result of which the non-EU aspects of the aviation ETS have for the time being had to be put on ice.4

Whilst the Commission is undoubtedly proceeding with a degree of caution in relation to shipping emissions against that recent background, it is proceeding nonetheless. Certain aspects of these latest proposals are reminiscent of some of the more controversial features of the aviation ETS scheme, as discussed further below.

Draft Regulation (EU) 525/2013

On 28 June 2013 the Commission published draft Regulation EU 525/2013 for "the monitoring, reporting and verification of carbon dioxide emissions from maritime transport" (the "Draft Regulation").

The Draft Regulation would, if approved by the EU Parliament and Council, be of direct effect in Member States (i.e., without the need for implementing measures) and introduce a compulsory programme of monitoring, reporting and verification of individual vessels' CO2 emissions as a first step towards later introducing a market-based mechanism (MBM) to limit shipping GHG emissions or efficiency standards.

For the time being it does not propose that other GHGs or pollutants such as SOx and NOx should be monitored as it is believed that existing vessels' equipment and documentary procedures would not permit this without additional investment, and because the Commission is wary of imposing too great an administrative burden on ship owners and operators in the first instance.

In very general terms, the Draft Regulation envisages that vessels will be required to calculate and report their annual CO2 emissions over 12-month reporting periods, based principally on fuel type and fuel consumption data recorded in their log books, noon reports and delivery bunker notes.

The emissions calculations would need to be verified by an independent and accredited third party and made publicly available.

It is hoped by the Commission that this will of itself incentivise ship owners and operators to invest in energy efficiency solutions, as it will be the first time that comprehensive transparent industry-wide data about vessels' fuel consumption and efficiency will be widely available to the market.

Further, a document of compliance would need to be kept on board and available for inspection at EU ports. In fact, the European Commission memorandum accompanying the Draft Regulation suggests that the document confirming compliance with the monitoring and reporting obligations should be added to the list of certificates and documents required to be kept on board by Article 13(1) of Directive 2009/16/EC. This is significant because in certain cases, Directive 2009/16/EC permits the detention of ships that are not carrying mandatory certificates and documents.

The Draft Regulation contains the usual requirement that Member States impose "proportionate, effective and dissuasive" penalties for failure to comply with the various provisions of the legislation. It is specifically envisaged in the Draft Regulation that if a vessel fails to comply with monitoring and reporting requirements for more than one reporting period the national state port authority may issue an expulsion order prohibiting that vessel entering any other Member State port until the vessel has complied with its unfulfilled obligations.

Who will be affected and when?

It is proposed that the Regulation would enter into force as soon as 1 July 2015. The first reporting period would begin on 1 January 2018 so as to give Member States and industry operators time to prepare for compliance.

The scheme will only apply to "large" vessels, defined as those of 5,000 gross tons or more; so most vessels engaged in international trade.

The compliance obligation rests with "companies" which are defined as "the owner of [a covered ship] or any other person such as the manager or the bareboat charterer, who has assumed the responsibility from the ship-owner for its operations". Thus this would presumably include third party ship management companies who have taken over the technical management of a vessel. In echoes of the EU aviation ETS, two features that may prove to be controversial are:

  1. That the legislation will apply regardless of a vessel's flag state
  2. That the MRV requirements will apply not only to all CO2 emissions generated during voyages between EU ports and at EU ports (for instance at berth or manoeuvring within port) but also, importantly, to emissions from:
  • Incoming voyages, i.e., from the last non-EU port of call to the first EU port of call
  • Outgoing voyages, i.e., from the last EU port of call to the first non-EU port of call

As such it will capture emissions generated outside Member State territorial waters and will require compliance by entities that would otherwise be outside Member States' jurisdiction.

What Next?

The Draft Regulation is not yet law. For a quick guide to the journey from European Commission proposal to legislative instrument, readers are referred to Reed Smith Client Alert No. 13-115 ( The Making of Emissions Trading Laws- Understanding the EU legislative process).

However, it can now reasonably be expected that the Commission's proposal will be approved in one form or another and so now is undoubtedly the time to take steps to lobby for any changes that industry as a whole or individual companies would like to see to these proposals.

Furthermore, the Draft Regulation is only the first step in a three stage plan for reducing GHG emissions. The memorandum that accompanies the Draft Regulation explains that once a system for monitoring, reporting and verifying CO2 emissions has been established, the data that is accumulated will potentially inform a programme of GHG reduction targets for the maritime transport industry and a system of market-based measures which the Commission presently believes might include a contribution or target-based compensation fund, or an emissions trading system.


1. COM(2013) 479 final - Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions
2. Energy Efficiency Design Index, MARPOL Annex VI
3. See the Europe 2020 Strategy COM (2010) 2020
4. Up in the air – the suspension of the aviation EU ETS for non-EU airlines Up in the air – the suspension of the aviation EU ETS for non-EU airlines: UPDATE

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.