No Maritime EU ETS account, no compliance: register or risk penalties

The deadline of 31 March 2025 for submitting verified maritime emissions studies below the Maritime EU Emissions Buying and selling Scheme (“EU ETS”) which commenced final yr is quick approaching. With solely 2,302 Maritime Operator Holding Accounts (“MOHAs”) opened so far, out of 23,000 vessels anticipated to fall inside scope, most delivery corporations will inadvertently discover themselves to be non-compliant with EU ETS as soon as the deadline hits. This might lead to monetary penalties being incurred and, in some instances, operational restrictions. On this briefing we talk about the state of play in relation to MOHAs and the doubtless repercussions of not assembly the deadline.

BackgroundSince 1 January 2024, delivery corporations answerable for vessels of 5,000GT and above have been topic to the expanded EU ETS, which imposes obligations to watch their emissions within the first compliance yr of 2024, open MOHAs and put together for the submission of their first verified emissions studies by 31 March 2025. With solely every week remaining earlier than the primary EU ETS reporting deadline and fewer than six months earlier than the give up of EU ETS allowances (“EUAs”) deadline of 30 September 2025, many delivery corporations are both too relaxed or in a state of frenzied rush in making an attempt to open MOHAs. We perceive that registries in numerous member states proceed to wrestle to handle the big volumes of functions which have been made. The lack of awareness amongst registry workers of the complexities of the maritime business in addition to the dearth of help and steerage from the European Fee to the registry workers stand as maybe the largest hindrance to the well timed and efficient opening of MOHAs.

MOHA requirementShipping corporations falling inside scope of Maritime EU ETS should be registered within the Union Registry with an lively MOHA. This account is required to submit verified emissions studies by 31 March and give up allowances on 30 September 2025 (see our earlier articles on key necessities and key compliance deadlines below EU ETS). With no correct registration within the Union Registry with an lively MOHA, verification societies (i.e. class societies reminiscent of Lloyds, DNV, RINA and so forth) will be unable to submit verified emissions studies to administering authorities in every jurisdiction. This can inevitably create a further backlog in compliance – the absence of MOHAs prevents correct reporting and verification of emissions in addition to give up of allowances. Within the worst-case state of affairs, this might lead not solely to non-compliance penalties below EU ETS (€100 per tonne of unreported carbon and the duty to give up lacking allowances later) but in addition to operational restrictions, reminiscent of expulsion from or detention in port if delivery corporations proceed to run into difficulties with registration, reporting or give up of allowances for 2 or extra consecutive intervals. Legal responsibility is on a company-wide foundation, so if one vessel belonging to a delivery firm is arrested in port, then all that firm’s fleet might be topic to restrictions or suspension of operations.

Key TakeawaysIt is vital to maintain a transparent paper path of all communications with the related registries to display efforts being made to open MOHAs. The identical applies to any communications with administrative authorities in every jurisdiction in addition to with class societies who’re awaiting MOHA particulars to have the option correctly to confirm emissions studies and submit them to administering authorities. While there will likely be room to argue that any non-compliance arose attributable to administrative delays within the occasion of any penalties being levied, if there is no such thing as a proof of sensible steps being taken to resolve this, any prospects of efficiently mounting such defences will likely be significantly undermined. WFW is liaising with registries in several jurisdictions each day and serving to purchasers to avoid and surmount any administrative and regulatory obstacles while regularising any potential non-compliance.