On 31 January 2024, the EU published its anticipated list allocating shipping companies to administering authorities in which the shipping companies must register to open a Maritime Operator Holding Account. A MOHA is required to submit allowances under the EU ETS. Below is a summary of relevant deadlines and the next steps which should be taken by all shipping companies to ensure compliance with the EU ETS and EU MRV.
The list, which may be accessed here, is based on available information of the country of registration in the database Thetis-MRV, or the state in which a vessel has had most port of calls in the preceding four years, based on data from SafeSeaNet, as of 20 November 2023.
Therefore, the list may not be accurate in reflecting the new definition of "shipping company", which entails that the registered owner is now the default responsible party under the EU Emission Trading System (EU ETS) and the EU Monitoring, Reporting and Verification (EU MRV) Regulations.
A registered owner who does not wish to be the responsible party under EU ETS and EU MRV may delegate this responsibility to the ISM Company by drafting a mandate letter in compliance with the formalities set out in Commission Implementing Regulation (EU) 2023/2599. Thommessen can assist with preparing the mandate letter.
Deadlines and next steps
- A shipping company which is included on the list has 40 working days from the date of publication of the list to apply for a Maritime Operator Holding Account (MOHA) in the state they have been allocated to.
- A registered owner that wants to delegate responsibility for compliance with the EU ETS and EU MRV Regulations to an ISM Company which is included in the list should provide the ISM Company with its mandate letter in time for the ISM Company to apply for a MOHA within 40 working days.
- A shipping company which is not included in the list, must apply to open a MOHA within 65 working days of its first port call in the EU. The shipping company must open an account in the state in which they have had the most port of calls in the preceding four years, or if no such port calls, in the state in which the vessel has its first port of call in the European Economic Area.
- A registered owner that does not want to delegate the responsibility for compliance with the EU ETS and EU MRV Regulations to the ISM Company should be aware that it will need to submit a verified monitoring plan under the EU MRV Regulation by 1 April 2024.
Only the party responsible for EU ETS compliance may open a MOHA, but any company may open a trading account, as long as they comply with the requirements applicable in the relevant state. For example, in Norway, the Norwegian Environmental Agency requires the applicant for a trading account to be a company registered in the Norwegian VAT Register.
A trading account may be used to purchase, receive and transfer allowances, and will be required to set up a functioning chain to pass allowances from the operator of the vessel (often the time charterer), to the party responsible for compliance with the EU ETS, such as the ISM Company.
All companies that will need to submit and/or purchase allowances, should apply now to set up MOHA and/or trading accounts (as applicable). Additionally, it is important to ensure that the legal, financial and practical responsibility for EU ETS and EU MRV compliance is properly allocated between the parties in all relevant contracts in the contractual chain, for example in management agreements, charterparties, pooling agreements and so forth.
Thommessen is assisting in setting up and reviewing contractual structures for allocation of the legal, financial and practical responsibility of EU ETS and EU MRV compliance.
