Managing complex emissions regulations
The maritime industry faces increasing pressure to reduce greenhouse gas emissions and some of the most advanced emissions regulations for shipping are from the European Union (EU).
With evolving regulatory frameworks like the European Union Emissions Trading System (EU ETS) and the upcoming FuelEU regulations, shipowners, operators, and charterers must navigate these complex compliance requirements.
To help meet these, Lloyd’s Register OneOcean has launched Risk Manager, an all-in-one solution for simplifying compliance and managing emissions risks across entire fleets.
Launched at SMM, Risk Manager ensures efficient management of a company’s EU Allowance (EUA) obligations, by offering a single platform that provides a clear, comprehensive view of a vessels and fleet’s exposure to emissions regulations.
A comprehensive approach to managing EU ETS exposure
Barry Hooper, LR OneOcean VP Product & Tech – Perform, explains “Through this platform, we’re giving owners, operators, and charterers the tools they need to accurately manage their EU ETS exposure. They can plan how they are going to deal with this exposure and then close it out or make sure they've closed out their exposure and received the EUAs they need for the voyages they've done with all their different counter party organisations.”
The platform delivers a full lifecycle approach to emissions management, offering pre-voyage insights, real-time monitoring, and post-voyage analysis. Its capabilities are built around the core functions of simulate, plan, and monitor.
Before a voyage, it allows users to simulate future exposure to tailor voyage considerations and generate scenarios based on time, cost, fuel efficiency, or just-in-time arrival. This provides crucial insights for developing an EUA strategy, including estimations of Carbon Intensity Indicator (CII) ratings, required allowances, and total voyage costs.
The planning function delivers the ability to quickly gain a clear understanding of the exposure profile risk based on easily accessible data. Overall EUA exposure can be viewed, historical balances can be tracked, and future exposure can be forecasted. Instant EUA spot rates can be accessed, while transaction data from the Union Registry is easily imported so that EUAs can be assigned to voyage exposures.
Real-time monitoring and post-voyage emissions reporting
During a voyage, it provides accurate tracking of fuel consumption data and real-time comparisons to predicted EU ETS exposures, ensuring users have a precise view of their emissions profile in relation to the allowances they need. The system’s monitor functionality makes it easy to track a vessel’s voyage-by-voyage realised exposure and CII score, access validation reports and consumption statements in one place – which will be integrated with LR’s Emissions Verifier for streamlined compliance - plus view emissions history, historical voyages and reported data for a selected vessel enrolled in the solution.
Post-voyage, the platform delivers essential reporting, tracking EUA transactions against actual voyage data, helping companies balance risk and ensure compliance while optimising their environmental impact.
“We are streamlining the workflow and reducing the workload that gives customers situational awareness and enables them to take a strategic approach to managing their exposure,” says Hooper. “A lot of companies at the moment are reacting where they're just looking at what they have consumed. Risk Manager allows customers to think more proactively around what their exposure is, what the price in the market is doing and go away and make decisions based on verified and real-time data.”
“Other products have come onto the markets, but they took a very different approach from us where they focused on historical information, so they don't have the ability to forecast or help enable strategic decisions. They also don't have an integration with Union Registry account data and have no way of automatically importing the consumption data for vessels, which we do. With Risk Manager, we solve the workflow issue and we have the components to support it.”
Future-proofing for upcoming emissions regulations
The platform is also designed with future compliance needs in mind, such as the upcoming FuelEU regulations set to take effect in January 2025. It is also equipped to support emissions management in other regions around the world, positioning users for success in an increasingly carbon-conscious market.
Hooper adds: “This is the first step in LR becoming the emissions compliance partner for the industry.”
This article was featured in the October 2024 issue of Horizons, Lloyd's Register's quarterly publication, offering expert insights and thought leadership on key trends in the maritime industry.