New EU regulation

Following the agreement between the negotiators of the European Parliament and the European Council on the regulation setting out new rules for the monitoring, reporting and verification of carbon dioxide emissions from vessels on December 17 2014,(1) new EU Regulation 2015/757 on the monitoring, reporting and verification of carbon emissions from maritime transport, and amending EU Directive 2009/16/EC, was adopted on April 29 2015 and entered into force on July 1 2015.

The new regulation will apply to shipping activities carried out from January 1 2018 in relation to vessels above 5,000 gross tonnes that call at the ports of EU member states. It will oblige the shipowners or operators of such vessels – whatever the flag of the vessel and wherever their registered office is based – to monitor and report carbon dioxide emissions for each vessel on a per-voyage and annual basis. The annual reports will be verified by an independent entity, which will issue a document of compliance to be kept on board the vessel. Prior to actual monitoring, shipping companies will also have to submit to the verifier a monitoring plan for each of their ships by August 31 2017. Some of the information included in these reports will also be made available to the public.

EU member states must also establish a system of penalties for failure to comply with the new obligations. Previously, no European obligations in relation to the provision of information or declarations of carbon dioxide emissions applied to the shipping industry, as EU Regulation 525/2013(2) excluded shipping from its scope.

French regime

France is one of several countries to have enacted legislation in advance of the new EU regime, to show their commitment to the protection of the environment. Towards the end of the year, France will host the international climate conference COP 21;(3) and it has already introduced certain provisions carbon dioxide emissions, which entered into force on October 1 2013 and apply to maritime carriers, among others. The relevant provisions(4) essentially oblige all carriers – whether of goods or passengers – to supply to cargo interests or passengers information relating to the quantity of carbon dioxide emitted by the mode(s) of transport used to provide the service, where the origin or destination of the carriage is within the French territory (including French overseas departments and territories). The fact the carrier is registered abroad does not exonerate it from these obligations.

The information to be provided – at the latest within two months of the end of the carriage – is the total quantity of carbon dioxide emitted in both the upstream and operating phases of the carriage. Emissions in the upstream phase (ie, before the fuel is actually consumed) include – for fuels – any carbon dioxide emitted to extract the crude oil, its refining operations and any fuel transport operations. The operating phase includes all operations of carriage from the origin to the destination, as well as emissions during repositioning of the vessel, the movements made while the vessel is in ballast and emissions while the vessel is stopped, with the engine functioning, linked to these operations.

Various calculation methods, of varying complexity, may be used to determine the emissions information to be provided and the French government has issued guidance to assist carriers in this regard. Upon request from a passenger or cargo interest, the carrier must specify the calculation method used.

While these provisions have been in force for more than a year now, many operators have not yet implemented procedures that would allow them to provide this information on a regular basis. This is probably due to the administrative burden involved. However, the fact that non-compliance attracts no criminal or financial penalties is also a relevant factor. The absence of penalties is a political decision, probably linked to the fact that the obligations set out in the regulations impose a heavy burden on all companies involved in transport and a number of difficulties must be overcome before any penalties can be applied.

The Ministry of Transport plans to issue a report evaluating the application of these provisions in 2016 and no penalty system will be put in place before then. However, the French government may use the obligation for EU member states to establish penalties for non-compliance with the new EU regulation as a pretext also to impose penalties for non-compliance with the domestic legislation on carbon dioxide emissions information.

Comment

While the existing French provisions and the new European regulation both aim to provide users with more information on carbon dioxide emissions and ultimately to limit such emissions, their content is different. It is likely that any procedures put in place to comply with French law will be helpful once the European regulation takes effect. However, it will be necessary to ensure that there are no inconsistencies between the information required under French law and that required under the European regulation - in particular, insofar as methods of calculation are concerned.

For further information on this topic please contact Lei¨la Esnard at Lewis & Co by telephone (+33 1 77 72 64 21) or email (leila.esnard@lewiscolaw.com). The Lewis & Co website can be accessed at www.lewiscolaw.com.

Endnotes

(1) See European Council press release of December 17 2014, www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/envir/146374.pdf.

(2) EU Regulation 525/2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and union level relevant to climate change.

(3) COP 21 will take place from November 30 to December 51 2015 in Paris.

(4) Article L1431-3 of the Code of Transport and Decree 2011-1336 of October 24 2011.

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