Case study: environmental risk management for the maritime sector
September 18, 2024
The European Union has established comprehensive maritime environmental regulations to address the pressing issues of marine pollution and environmental degradation. These regulations aim to protect marine ecosystems, promote sustainable use of marine resources, and prevent marine pollution, thereby safeguarding the marine environment for future generations.
Key components of these regulations include stringent measures on vessel emissions, waste management protocols, and restrictions on the discharge of pollutants into the sea. Two important aspects of the maritime regulatory framework include (i) a bespoke emissions trading scheme for the maritime sector, or ETS, which commenced in 2024 and which applies to all ships above a gross tonnage of 5,000; and (ii) a FuelEU regulation which seeks to require all ships above a gross tonnage of 5,000 to carry on board a “FuelEU certificate of compliance” as evidence of compliance with the limits on the greenhouse gas intensity of the energy used on-board by a ship and with the requirements on the use of on-shore power supply at berth.
The ETS framework was agreed in December 2022 and the FuelEU will apply from January 2025. Compliance is on a companywide (rather than per ship) basis and “shipping company” is defined widely to capture both the ship owner and any contractually appointed commercial operator/ship manager/charterer.
The cap under the ETS is intended to capture 100% of the emissions from intra-EU maritime voyages, 100% of emissions from ships at berth in ports located in the European Union and 50% of emissions from voyages which start or end at ports located in the European Union. All ETS maritime allowances will be auctioned and there will be no free allocation; 78.4 million emissions allowances have been allocated specifically to maritime.
Our work in this area has focused on helping clients operationalize the new regulatory requirements while also taking steps to manage related risks. In this respect, for our French and Italian maritime clients, we have assisted with the adoption of new systems, including personnel and data management systems, costs recovery mechanisms, revised service agreement terms and emissions reporting procedures.
As part of our commitment to supporting maritime sustainability programs, we have also provided extensive training programs aimed at familiarizing their teams with the intricacies of the new regulations. These training sessions encompass practical insights into emissions reporting processes and adherence to ETS and FuelEU requirements.
By focusing on operationalizing sustainability, we seek to ensure compliance while fostering a culture of environmental responsibility and innovation that not only meets regulatory expectations but also positions our clients as leaders in maritime sustainability.
CPM
