In Emergency Situations
04 Feb, 2025

AB ETS (EU ETS) What is it?

New regulations related to maritime transportation have been introduced by the Directive 2003/87/EC amended by Directive 2023/959/EU, which brings maritime transportation under the scope of the EU Emissions Trading System (EU ETS).​

The European Union Emissions Trading System (EU ETS) is the world’s largest carbon market, aiming to reduce greenhouse gas emissions through a “cap and trade” system. The system helps the EU achieve its goal of reducing greenhouse gas emissions by 62% by 2030 compared to 2005 levels.​

– It operates in all EU member states as well as Iceland, Liechtenstein, and Norway (EEA-EFTA countries).
– As of January 1, 2024, it has been expanded to include maritime transportation.

Which ships are covered by the EU ETS Directive?

Starting from 2024: Cargo and passenger ships with a gross tonnage (GT) of 5000 or more.

Starting from 2027: Offshore vessels with a GT of 5000 or more.

Which ships are covered by the EU MRV Maritime Regulation?

As of January 1, 2025:

– Cargo and passenger ships with a GT of 5000 or more.
– Offshore vessels with a GT of 5000 or more.

This document was prepared by Esenyel Partners.

Which emissions are covered by the EU ETS Directive?

The system is flag-independent and route-based. This means it covers emissions from maritime transportation in the following ways:​

  1. 50% of emissions from voyages starting or ending outside the EU (e.g., from Turkey to Rotterdam or from Hamburg to Turkey).
  1. 100% of emissions occurring between two EU ports and when ships are within EU ports (e.g., from Spain to Greece).

MOHA Account Opening Requirement:

MOHA is the account that maritime companies must open to record, monitor, transfer emissions allowances, and comply with the EU ETS. Shipowners may delegate their obligations to technical operators under the ISM Code. This account allows companies to record their annual emissions, check their allowance balances, and transfer allowances among participants. To open a MOHA account, a comprehensive request must be submitted to the designated administrative authority. The process for opening a MOHA account is a professional one that requires accurate and complete information. It is crucial to prepare all the necessary documents correctly and completely to ensure the application is successful.

Which EU Member State should the MOHA account be opened in?

1) Maritime Company Registered in an EU Member State: It must be opened in the EU Member State where the maritime company is registered.

2) Maritime Company Not Registered in the EU Member State but Operating in EU Ports: It must be opened in the EU Member State with the highest number of estimated port calls in the last four monitoring years.

3) Maritime Company Not Registered in the EU Member State and Has Not Operated Under the EU ETS in the Past Four Years: It must be opened in the EU Member State where the first EU ETS voyage is made or begins.

Conclusion and Recommendations:

It is essential for shipowners and operators to take all necessary steps to ensure EU ETS and MRV compliance. Identifying the parties responsible for compliance, carefully managing the application process, making the necessary contracts, meeting extensive document requests, and establishing effective communication with administrative authorities require intensive preparation, coordination, and documentation. Our experienced lawyers would be happy to guide you through the maritime operator holding account (MOHA) process.

If you require more detailed information, you can contact us using the contact numbers below.

Sources:
https://climate.ec.europa.eu/eu-action/transport/reducing-emissions-shipping-sector/faq-maritime-transport-eu-emissions-trading-system-ets_en (European Commission Official Website)

https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/union-registry_en (European Commission Official Website)

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02003L0087-20230605 (Official Publications Office of the European Union)

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32023L0959 (Official Publications Office of the European Union)

The above questions and answers are intended to guide maritime professionals in understanding the application of the EU Emissions Trading System to maritime transport. They do not replace the legislation. For more details, please refer to the updated EU Emissions Trading System Directive. Content last updated on 27/06/2024.

Esenyel Partners | European Union Emissions Trading System Implementation (EU-ETS)
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