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Interview: EU MRV data could aid IMO 2020 rule compliance: Verifavia CEO

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Interview: EU MRV data could aid IMO 2020 rule compliance: Verifavia CEO

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Drones present a costly solution for 2020 compliance

Verifavia developing verification approver system for SECA compliance

EU MRV, IMO DCS system might get aligned in future

Singapore — Compliance to the International Maritime Organization's global sulfur limit for marine fuels could be aided by data gathered by verifiers through the EU Monitoring, Reporting, Verification, or MRV, process, Verifavia CEO Julien Dufour told S&P Global Platts Friday.

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Verifavia is among the world's leading emissions verification company for the transport sector, both aviation and shipping.

Less than 10 months remain for the IMO 2020 rule to be implemented. Still, a lot of uncertainty shrouds the implementation of this rule, which is fraught with huge operational challenges as well as high related costs.

"This is a key year for shipowners to make informed decisions about their marine fuel options and for port authorities to devise ways to ensure compliance," Dufour said in an interview.

Some ports have decided to use drones for this purpose. However, that could be a costly solution, Dufour said.

The data gathered by verifiers through the MRV process could assist Port States to ascertain whether or not a vessel is in compliance with the sulfur emissions control requirements, Dufour said.

The EU MRV regulation requires ships of 5,000 gross tonnage or greater to collect data from January 1, 2018, to monitor CO2 emissions, fuel consumption and other parameters, such as distance traveled, time at sea and cargo carried on a per voyage basis, in order to gather annual data into an emissions report submitted to an accredited MRV shipping verifier.

Checking sulfur levels by using AIS data and examining log books, both of which verifiers have access to already, could also help in improving compliance to the global sulfur cap rule, Dufour said.

In addition, verifier's access to bunker delivery notes, which includes the sulfur content and the outcome of the laboratory analysis, could also support this process, Dufour said.

"In this regard, we are also working on designing an independent verification approver system to ensure SECA compliance," Dufour said.

Meanwhile, the EU MRV regulation is also progressing well, Dufour said.

About 99% of the ships subject to the EU MRV rule have a monitoring plan in place, Dufour said, adding that most of them were now preparing reports for the first reporting period of 2018.

Shipowners will have to present the first annual emissions assessment -- verified by an independent auditor -- by April 2019 and will have to carry the document of compliance on each ship by June 30, 2019.

"Currently, we have more than 1,700 ships under EU MRV contracts to be verified," Dufour said.

The regulation has important commercial implications for ships without a document of compliance, said Dufour.

If a ship fails to comply with this regulation for two consecutive years, port authorities will issue an expulsion order -- meaning the ship will be subsequently banned from entering EU ports.

Under EU MRV, individual ship data will be made publicly available.

The European Commission expects that 'naming and shaming' of ships will also promote fuel efficiency, Dufour said.

Meanwhile, this will also encourage charterers to include fuel efficiency in their ships selection process, he added.

Besides being an EU MRV verifier, Verifavia is the first independent IMO DCS verifier in Panama, Liberia, Antigua & Barbuda, Vanuatu, Palau and Dominica.

The IMO's Data Collection System, or IMO DCS, was implemented on March 1, 2018 and requires vessels of 5,000 gross tonnage or above to collect and report data on fuel consumption, distance sailed, and hours underway to an IMO database from 2019.

"The IMO DCS is very similar to EU MRV. Still, we expect the two systems to run in parallel over the next few years," Dufour said.

"Ultimately, the two systems might get aligned. The objective is not to just collect the data, but to use this data to design and implement a market-based measure to tackle emissions from the sector," he said.

This could take the form of an emission trading scheme or an offsetting scheme, he said.

Under the emissions trading scheme, a cap is set on the total amount of certain greenhouse gases that can be emitted and within that limit, they receive or buy emission allowances, which they can trade with each other, he said.

Under the offsetting scheme, carbon offsets are purchased to compensate for the GHG emissions caused, he said.

"Among the multiplicity of regulations shipowners need to become pragmatic, efficient and compliant at a reasonable cost to them," Dufour said.

-- Surabhi Sahu, surabhi.sahu@spglobal.com

-- Edited by Ikhhlaq Singh Aujla, newsdesk@spglobal.com