LionRock Maritime Logo 2022
Request a Demo

The Impact of CSRD and ESRS on Maritime Sustainability Reporting

By
April 25, 2024

Category: Maritime Decarbonization and Emissions

CSRD Europe EU Report Scope 3 - LionRock Maritime
Photo from Ronan Furuta

The Impact Of CSRD And ESRS On Maritime Sustainability Reporting


Unpacking the Regulatory Shifts and Their Implications for Maritime Companies and Tugboat Operators

In the wake of the European Union’s ambitious Green Deal, maritime companies, including tugboat operators, are transitioning into a time when sustainability reporting will become the norm. The driving force in this change is the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS), both of which set out to transform how companies report on their environmental, social, and governance (ESG) metrics. This article delves into the regulations and unpacks how they will impact the maritime sector, helping the industry understand the road ahead. 

Why the CSRD and ESRS?

The CSRD mandates that all large companies and listed SMEs in the European Union adhere to common mandatory standards for sustainability reporting. To operationalize these requirements, the ESRS were developed, providing detailed guidelines that ensure uniform and comprehensive disclosure across a range of ESG issues. These standards are designed to make the sustainability reports more comparable and reliable, thereby enhancing transparency in how companies impact the environment and society. Thus, while the CSRD sets the stage for comprehensive sustainability reporting by large companies and listed SMEs across the EU, the ESRS provides the detailed script and guidelines, ensuring each actors’ performance is consistent and can be effectively evaluated. 

In short, the CSRD and ESRS have two aims. Firstly, they are designed to enhance clarity for investors and, secondly, for aligning corporate activities with the EU’s Green Deal agenda. This dual-purpose aims to standardize sustainability disclosures, which will enable investors and other stakeholders to make more informed decisions based on the sustainability performance of companies, in turn, further redirecting capital towards sustainable businesses. Not only does this encourage companies to adopt greener and more socially responsible practices, it also contributes to the EU’s objective of achieving a sustainable and inclusive economy. 

Which companies need to report under CSRD requirements?

The CSRD will be implemented in phases, starting with companies already subject to the Non-Financial Reporting Directive (NFRD). Gradually, the scope will expand to include all large companies, listed SMEs, and eventually, certain non-EU entities by 2028. This phased approach allows companies time to adapt to the new requirements but also places immediate pressure to start preparing for compliance.

 

 

Minimalist Timeline Diagram Concept Map CSRD Timeline and Roadmap for Maritime Industry
CRSD Timeline for Maritime Industry

Implementing the ESRS

The ESRS went into effect on January 1, 2024, affecting all companies previously subject to the Non-Financial Reporting Directive (NFRD). Regarding the newly adopted legislation, companies are mandated to report on the following key points: 

Companies must report on their emissions, quantitatively and qualitatively. Emission reporting concerns direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and other indirect emissions (Scope 3), which include emissions along the value chain, such as those from purchased goods and services, business travel, employee commuting, waste disposal, and use of sold products. For the first reporting year, a company with less than 750 employees may omit scope 3 emissions. In addition to the quantitative metrics on their GHG emissions, companies must provide qualitative information about the data they report. This is to contextualize the data, and provide an overview of the structures in place to manage environmental issues. 

The principle of double materiality in the ESRS ensures comprehensive sustainability reporting by addressing financial and impact materiality. Financial materiality focuses on how ESG issues affect a company’s financial performance, influencing investor decisions and economic outcomes. Impact materiality assesses the effects of a company’s operations on society and the environment, considering the significance of the company’s activities on external factors like ecological health. Companies must identify which emissions hold material significance from these perspectives and report them appropriately. 

Finally, to ensure compliance and reliability of the reported data, ESRS disclosures are subject to verification. Companies are required to implement robust internal processes to manage data gathering, verification, and reporting, and these processes may also need to be audited by certified professionals. Given the comprehensive nature and novelty of the ESRS, companies might still be adjusting their systems to fully align with these standards. Support and guidelines from the European Financial Reporting Advisory Group (EFRAG), which developed the ESRS, along with assistance from national regulators, is expected to aid companies in this transitional period. 

Implications for the Maritime Sector? Sector-specific ESRS

The CSRD and the newly adopted ESRS will change reporting of GHG emissions for the maritime sector. The legislation recognizes that sectors are often exposed to similar sustainability-related risks, just as they often have similar impacts on society and the environment. Therefore, sector-specific standards will also be developed under the ESRS, which will provide the necessary clarity and guidance to address the unique challenges faced by the maritime transportation industry when reporting its emissions. According to Article 29b(1), third subparagraph, of the Accounting Directive sets the adoption date of the sector specific ESRS by mid-2026. The maritime sector must wait for reporting standards that provide clearer guidance, and for now rely on the general guidelines of the CSRD. 

While the ESRS sector-specific reporting standards are not yet known, the classification of the sector is. The ESRS define marine transportation as consisting of undertakings that provide deep-sea, coastal, and/or river-way freight shipping services. Key activities include transportation of containerized and bulk freight, including consumer goods and a wide range of commodities. This also includes the transport of passengers or freight over water, whether scheduled or not. Also included are the operation of towing or pushing boats, excursion, cruise or sightseeing boats, ferries, water taxis etc. The section below will elaborate in-depth on how tugboats might are affected. 

Impact of CSRD on Tugboat Operators – Materiality and Indirect Emissions

In line with the criteria for large companies and publically listed SMEs listed in the timeline, it is reasonable to conclude that a relatively small portion of tugboat operators meet these criteria, and will thus be directly impacted by the CSRD. Nonetheless, although the CSRD first has to be reported by large and EU-listed companies, the entire value chain of these companies are indirectly impacted. As part of the value chain of larger companies, who are subject to report on the CSRD, tugboats are considered part of their indirect, scope 3, emissions. 

The directive states that information about each actor in the value chain is not required unless it pertains to ‘material’ upstream and downstream value chain information. The concept of “materiality” plays a central role here, indicating that emissions from tugboats would need to be included if they are significant in relation to the vessel operator’s environmental impact. In analyzing the materiality of tugboat operators, companies need to consider their environmental and financial impact. First, if greenhouse gases emissions and other pollutants of tugboat operators contribute significantly to the company’s total environmental impact, they are likely to be deemed material. Next, financial risks and opportunities associated with tugboat operations, such as potential costs related to fuel consumption, emissions regulation compliance must be considered, along with the potential for investment in cleaner technologies. Thus, the emissions from tugboat operations could be substantial enough to warrant consideration under the CSRD’s scope of reporting, particularly if the towage operations have, for example, inefficient fuel usage. In the end, it depends on the context of the company and their tugboat operator. 

Data transparency is required for the whole value chain, and companies are encouraged to strive for the most accurate data possible. Data from other parties in the value chain need to be sent at the request of firms, as these emissions must be included in their annual sustainability reports under the CSRD. Only in cases where precise data is not available or practical to obtain, are companies allowed to use estimates based on average consumption. This can involve using established industry averages, emissions factors, or other estimation methods that reflect the typical emissions produced by such activities. This is particularly important for emissions sources where the company does not have direct control or complete data visibility, such as those involving third-party services. 

It is clear that the scope 3 emissions still leave some uncertainties, specifically regarding the definition of materiality and data transparency. For third-party services such as tugboats and other port operations, answers are likely provided once the sector-specific ESRS guidelines are out by 30 June 2026. While it is possible that the emissions of tugboats can be estimated, it is more likely that they will require accurate measurement, given this is possible. Lastly, a committee has been established to review the act at least every three years, suggesting the framework is evolving. This could lead to more specific guidelines on reporting emissions, as the CSRD is implemented. 

Challenges and Opportunities for Tugboat Operators

Precisely calculating emissions from maritime operations, including those from tugboats, presents several significant challenges that can contribute to administrative burdens for companies. Firstly, the variability in tugboat operations – affected by factors such as differing fuel types, operational conditions, and aging fleets – complicates the accurate measurement of emissions. Collecting consistent and reliable data across diverse operational scenarios demands robust tracking systems and potentially significant investments in technology and training.


The administrative load is further increased by the need for ongoing data verification to meet reporting standards under regulations such as the CSRD. This involves not only the initial setup of measurement and reporting systems, but also their continuous management and updates to comply with evolving standards and technologies.


At the same time, the pursuit of precise emissions calculations opens substantial opportunities for the maritime sector. Enhanced accuracy in emissions reporting drives greater transparency, providing clear insights into environmental impacts and operational efficiencies. This visibility can lead to better-informed decisions by stakeholders, including investors, regulators, and customers, who are increasingly valuing sustainability.

 
The focus on detailed emissions data encourages companies to adopt more sustainable practices. Identifying specific sources and amounts of emissions allows for targeted interventions, such as upgrading tugboats to more efficient technologies or optimizing operational practices to reduce fuel consumption and emissions. Over time, these improvements contribute to a more sustainable maritime sector, aligning with global environmental goals and potentially leading to cost savings through more efficient operations.

Competitive Advantage Through Transparent Emissions Data

Having transparent and reliable emissions data provides a distinct competitive advantage in the maritime sector. As regulatory and consumer expectations shift towards greater environmental responsibility, companies that can demonstrate effective emissions’ management through accurate data not only meet these demands but also differentiate themselves in the market. Transparent emissions reporting allows companies to showcase their commitment to sustainability, enhancing their reputation and appeal to eco-conscious clients and partners. This transparency, coupled with competitive service pricing, positions these companies as leaders in sustainability, making them more attractive in tender processes and partnerships where environmental impact is increasingly a deciding factor.

The implementation of the CSRD is indicative of a broader trend toward stricter environmental regulations and the expectation of more detailed data transparency. This regulatory shift encourages companies and their suppliers to not only comply with existing mandates, but to anticipate and prepare for future, more stringent requirements. By proactively enhancing their data collection and reporting systems, companies can ensure they remain adaptable and resilient in a regulatory landscape that is likely to evolve with increasing focus on sustainability. This forward-thinking approach not only minimizes future compliance risks, but also positions companies to take advantage of emerging opportunities related to sustainability advancements and innovations.

Conclusion

It is important to remember that the CSRD seeks to enhance ESG reporting and improve transparency across companies. While there might be some questions in the short term, the main objective is to ensure that businesses give stakeholders complete and credible ESG information in the future. Therefore, it is necessary to stay updated of any changes to the reporting requirements, while attempting to adapt to the existing. Not only does the CSRD and ESRS enhance transparency and accountability but also propel maritime companies, including tugboat operators, toward integrating robust ESG practices into their core operations.

The enactment of the CSRD and the ESRS signifies a shift in the maritime sector, impacting large and small companies. As the industry moves toward heightened transparency and standardized reporting, tugboats, as integral components of the maritime value chain, must adapt to these changes, ensuring their operations are accounted for within the broader scope of indirect, Scope 3 emissions. This requirement not only fosters greater accountability but also opens avenues for tugboat operators to enhance their sustainability measures.

Get data on your emissions with LionRock

As the CSRD and ESRS reshape the landscape of sustainability reporting, it’s crucial for maritime companies, including tugboat operators, to stay ahead. At LionRock Maritime, we provide guidance and support to help you meet these new regulatory requirements. Our team is here to assist you in refining your sustainability reporting processes and improving your ESG practices. Contact us to learn more about how we can support your journey towards compliance and sustainability.

Request a Demo here

Frequently Asked Questions

What are the aims of the CSRD and ESRS?

The Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) aim to enhance the clarity and comparability of sustainability reporting across the EU. Specifically, they seek to standardize disclosures related to environmental, social, and governance (ESG) practices to ensure transparency and enable investors and stakeholders to make informed decisions. The primary goals are to align corporate activities with the EU’s Green Deal agenda, promote sustainable investment, and encourage companies to adopt more environmentally friendly and socially responsible practices.

When did the ESRS become effective, and what are its requirements?

The European Sustainability Reporting Standards (ESRS) became effective on January 1, 2024. They require companies to report both quantitatively and qualitatively on a range of ESG issues, including direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and other indirect emissions (Scope 3) that occur within the company’s value chain. The ESRS mandate comprehensive disclosures that cover the governance of ESG issues, the strategies employed to address them, and the risks and opportunities these issues present. The reporting under ESRS also involves a rigorous verification process to ensure the accuracy and reliability of the data provided.

Which companies are required to report under the CSRD and when?

The CSRD will be phased in starting with companies already subject to the Non-Financial Reporting Directive (NFRD). Initially, this includes large companies and public-interest entities like banks and insurance companies. The scope will gradually expand to include all large companies, listed SMEs, and eventually certain non-EU entities by 2028. These phased implementations allow organizations time to adapt, but also place immediate pressure on them to prepare for upcoming reporting obligations.

What are the implications of the CSRD for maritime companies, specifically tugboat operators?

Maritime companies, including tugboat operators, are impacted by the CSRD, particularly through the requirement to report Scope 3 emissions, which encompass indirect emissions along the value chain. While only a small portion of tugboat operators may be directly subject to the CSRD, many are indirectly affected as part of the supply chains of larger entities that must comply. This inclusion in Scope 3 reporting necessitates that emissions from tugboats be considered if they are material to the environmental impact of the vessel operators they assist. This leads to greater accountability and the potential for enhanced sustainability measures across the maritime industry.

Related Topics

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions Foto von Mika Baumeister auf Unsplash Navigating Regulatory Change In Decarbonization:…

New Tugboat Software: A Fuel Consumption Monitoring Alternative | 2024

New Tugboat Software: A Fuel Consumption Monitoring Alternative | 2024

New Tugboat Software: A Fuel Consumption Monitoring Alternative | 2024 Photo by Steve Doig on Unsplash Revolutionizing Tugboat Fuel Efficiency:…

References

Related Posts

Green Ports: Decarbonizing Ports through Data and make Ports more efficient

By
March 21, 2024

Category: Maritime Decarbonization and Emissions

Port decarbonization - Green ports - Shipping carbon footprint | LionRock Maritime
Image by 12019 from Pixabay

Green Ports: Decarbonizing Ports through Data


A look into the maritime shipping industry, the environmental effect of inefficient ports, and how maritime companies use technology to combat this issue.

The International Maritime Organization (IMO) aims to have net-zero shipping emissions in under three decades. Yet, the global shipping industry produces over a gigaton of greenhouse gasses every year. While barriers to advancements for this goal are in no short supply, companies such as Techbinder and LionRock Maritime are already using data to reduce carbon waste.

Maritime Shipping as a Greenhouse Gas Contributor

According to the IMO, maritime shipping accounts for nearly 3% of all global greenhouse gas emissions. This is about 1.2 gigatons of human produced gasses, of which approximately 800–850 tons are carbon dioxide. Left the way it is, without policy or technological intervention, all shipping emissions are predicted to increase by 16% before 2030. The sheer volume of greenhouse gasses that comprise the shipping carbon footprint is a aggravating the climate problem and in need of solutions.  Ports are a primary cause of maritime shipping emissions, contributing to 2% of all greenhouse gas emissions, worldwide. Ports play a large, and essential, role in the shipping industry. This is why port decarbonization is a key component of lowering maritime emissions and creating a greener industry.
LionRock Tugboat Fuel Calculator - Port decarbonization
LionRock Tugboat Fuel Calculator - Port decarbonization

Port Decarbonization: a Closer Look

Port decarbonization is the process of eliminating environmental impact associated with activities in port, such as tugboat operations, and cargo handling. A key part of this is reducing carbon emissions. The goal is to transition ports to more sustainable and eco-friendly practices, for both local and global communities.

Workboats form a critical part in port decarbonization: A 2002 study in British Colombia and Washington State showed that 28% of port CO2 emissions were from harbor craft and tugboats, making them the second-largest port CO2 contributor, behind container ships.

Each step towards port decarbonization is a step towards a shared environmental goal. There are several strategies to achieve this. They include the use of renewable energy sources, more efficient technologies, and improved logistics to minimize emissions and environmental harm. Each solution comes with its own limitations, making some advancements easier to adopt than others. However, one major tactic to reduce emissions, optimizing operations through the use of data, is already in use.

 

You can schedule a meeting with our representatives and get a consultation on how you can achieve a better operational efficiency: Schedule a Call now.

Technology for the Environment

New technology helps ships pollute less. By using data, shipping companies can learn important things about how their ship’s operation. From granular data about ship’s maneuvering to the utilization and performance of its machinery. The insights gained can help see blind spots and areas for improvement.

While there are similarities between ship types, each of those also has unique characters that requires a tailored optimization approach. While route optimization is (still) considered a major source of fuel optimization and emission reduction for long haul ships to decrease emissions, it is probably less relevant for harbor tugboats. Harbor Tugboats typically operate over relatively short distances within ports, meaning they have less extensive routes to optimize.

Reducing the Carbon Footprint of Tugboats

Today, it is difficult to accurately measure and thereby help decrease the fuel consumption of tugboats. Tugs are designed for a wide range of operations and similarly have a wide spread in their consumption range. Fuel consumption meters, widely used in other shipping segments, have found low adoption in the tugboat sector. The high investment cost as well as the installation from a barrier. Not only are these units expensive, they are also time-consuming to install.

We wanted to address the challenges and promises of accurately measuring fuel consumption without having to rely on expensive fuel consumption meters. In doing so, trying to make data more accessible to tugboat owners, thereby contributing to the goals of port decarbonization and the creation of green ports. LionRock Maritime’s expertise is tug operations data. Applying machine learning and contextual data analysis, LionRock explored correlations between tugboat speeds, power variations, and the unique characteristics of the vessels they assisted, aiming to reduce the shipping carbon footprint. While the direct correlation between tugboat speed and power during light sailing is strong, large variances occur during vessel assistance. LionRock’s innovative models using contextual and engine data separately showed promising results. However, the fusion of these models provided strong predictions of fuel consumption per job, marking a significant breakthrough in accurately estimating tugboat fuel usage, thus contributing to port decarbonization efforts and the reduction of the shipping carbon footprint.

An obstacle to obtaining RPM data lies in its collection from the tug’s engine, necessitating an installation process. To streamline this installation process and ensure the tug remains in operation, LionRock partnered with Techbinder. A tech scale-up from the Netherlands with backing from Schneider Electric that produces and installs industrial grade and cyber-secure data-loggers. LionRock has built a set of software that decodes the data and understands the tugboat operations, helping to turn data into actionable advice. By combining hardware and software, this joint endeavor promises a low-cost solution for assessing tugboat fuel consumption without disrupting tugboat operations, thus advancing the vision of green ports.

The Future of Maritime Shipping

The future of the shipping industry is a low carbon footprint. Port decarbonization is an essential part of this process. As awareness and prevalence of environmental issues continues to grow, ports will have to level up to reduce their environmental impact. The International Maritime Organization has already set net-zero emission goals by 2050, for the entirety of international shipping. This is in alignment with the Paris Agreement, which calls for immediate emission reductions as well as net-zero greenhouse gas waste no later than 2050. In some countries, emissions cost the environment and businesses. The European Union has already instrumented fees for excessive CO2 emissions, adding financial pressure to reduce waste. 

 

Read here more about the IMO Decarbonization on Maritime Emissions

 

Existing services, such as LionRock’s “Waste Free Shipping” offer a way for companies to save money while contributing to more sustainable maritime shipping. By tracking port traffic and reducing fuel waste, organizations save time and money alongside carbon dioxide waste that would have entered the atmosphere. Recent innovations, such as Techbinder and LionRock Maritime’s Smart Vessel Optimizer, aim to streamline the measurement of carbon emissions, making it accessible and actionable. As more companies use data and technological advancements, the shipping industry has the potential to become greener. Technology offers the solution to decarbonize ports in a smart way, by saving resources and lowering emissions. This trend will benefit everyone, but is especially good for the planet.

Book a consultation to accelerate your business’s decarbonization objectives.

As the maritime shipping industry strives to achieve net-zero emissions, the importance of port decarbonization cannot be overstated. Companies like Techbinder and LionRock Maritime are leading the charge, leveraging data and technology to reduce fuel inefficiencies. With innovative solutions, we save money and contribute to a cleaner, greener future for all. Join us in the journey towards more sustainable maritime shipping. Schedule a demo now to make your shipping or towage business more eco-friendly.

Request a Demo here

Frequently Asked Questions

What is the environmental impact of maritime shipping?

According to the IMO, maritime shipping accounts for nearly 3% of all global greenhouse gas emissions. This is approximately 1.2 gigatons of human produced gasses, such as carbon dioxide. Left the way it is, without policy or technological intervention, all shipping emissions are predicted to increase by 16% before 2030. The sheer volume of greenhouse gasses that comprise the shipping carbon footprint is a climate problem, but also an area in need of climate solutions.

How can the shipping industry lower emissions?

Technological advancements can help lower shipping industry emissions. However, some of these advances are more accessible than others. Most shipping vessels currently require fossil fuels to operate. While developing fossil-free alternatives is necessary, it is a slow work in process. Another method of carbon-saving that is more readily implemented is through operational improvements. A key factor in that are taken by ports. Adopting methods that use market insights and data to make shipping as efficient as possible can significantly reduce carbon waste.

What is port decarbonization, and why is it important for the maritime shipping industry?

Port decarbonization refers to the process of reducing environmental impact associated with port activities, such as tugboat operations and cargo handling, by minimizing (and eliminating) carbon emissions. It is crucial for the maritime shipping industry because ports are significant contributors to greenhouse gas emissions, accounting for 2% of global emissions. Decarbonizing ports not only helps in lowering maritime emissions but also fosters sustainability and eco-friendly practices, benefiting both local communities and the planet at large.

What challenges are associated with implementing data-driven solutions for port decarbonization and the creation of green ports?

One challenge lies in obtaining accurate data, particularly about the efficient use of port assets, but also the exchange of information between stakeholders in the port call. However, collaborations between companies like LionRock Maritime and Techbinder aim to streamline data collection processes while minimizing disruptions. Additionally, there's a need to tailor solutions to fit the diverse needs of different types of ships, as technology that works for cargo ships might not be suitable for tugboats or carriers. Ensuring that these data-driven solutions contribute not only to port decarbonization but also to the creation of green ports involves overcoming technical, operational, and logistical challenges to implement sustainable practices effectively.

Related Topics

Tugboat Industry Growth and Strategies: Navigating Emerging Markets with Data Insights

Tugboat Industry Growth and Strategies: Navigating Emerging Markets with Data Insights

Tugboat Industry Growth and Strategies: Navigating Emerging Markets with Data Insights Foto von Dwi Cahyo auf Unsplash Navigating the Tugboat…

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions Foto von Mika Baumeister auf Unsplash Navigating Regulatory Change In Decarbonization:…

References

  1. Maritime Shipping- The International Council on Clean Transportation (2021)

  2. A review of the port carbon emission sources and related emission reduction technical measures- Science Direct (2023)

  3. Classifying maritime port emissions – Science Direct (2023)

Related Posts

IMO Decarbonization on Maritime Emissions: Tugboat Compliance & Solutions

By
January 31, 2024

Category: Maritime Decarbonization and Emissions

IMO Decarbonization maritime - decarbonization of shipping - tugboats
Foto von Mika Baumeister auf Unsplash

Navigating Regulatory Change In Decarbonization: Implications For The Tugboat Industry


Understanding Evolving Maritime Regulations and Overcoming Challenges during the IMO Decarbonization Phase

In response to escalating concerns about climate change, the shipping industry is undergoing a transformative phase led by global mandates such as the International Maritime Organization’s (IMO) ambitious targets for net-zero greenhouse gas emissions (GHG) by 2050. Additionally, regional regulations, such as the European Union’s ETS system, are set to impact emissions reduction strategies in and across the maritime sector. Their impacts on the tugboat industry, although limited today, are likely to be increased in the near-future.

International Maritime Organization Logo Decarbonization Tugboat legal - LionRock Maritime
International Maritime Organization Logo

IMO Decarbonization: What are the main global and regional regulations around emission and emissions reduction?

Global Regulations

The IMO, a United Nations agency responsible for regulating shipping, sets global standards for the safety, security, and environmental performance of international shipping. The IMO has set targets aimed at achieving net-zero greenhouse gas emissions (GHG) by 2050, establishing a timeline with essential milestones. Using 2008 levels as the baseline, the organization aims to achieve a 40% reduction in greenhouse gas emissions by 2030.

To meet these ambitious goals, the IMO’s 2023 strategy outlines a timeline for implementation. However, a 2023 IMO study indicates that the current policy measures might not sufficiently reach the 2030 goal. The study suggests the need for increased policy ambition, stating that policies effective by 2025 are necessary to achieve the targets. Consequently, to maintain the set timeline, the implementation of further policies may be needed, suggesting that further policies and restrictions are in development.

Starting from January 1, 2023, all ships are mandated to calculate their attained energy efficiency Existing Ship Index (EEXI) to measure their energy efficiency. Simultaneously, they are required to begin data collection for reporting their annual operational carbon intensity indicator (CII), assessing a ship’s annual reduction factor necessary for improving operational carbon intensity. Ships will receive ratings (A, B, C, D, or E) based on their CII performance levels. Ships consistently underperforming (rated D for three years or E for one year) will need to submit corrective performance plans. Later, as mid-term measures are adopted in 2025, a fuel standard and GHG pricing mechanism will be introduced. The combination of these measures is essential to create demand certainty for new fuels and incentivize the green transition.

 

Regional Regulations

In addition to the global IMO system, the European Union’s Emission Trading System (EU-ETS) will expand to include the maritime sector. The cap-and-trade system is the cornerstone of the EU’s strategy, ensuring the EU’s climate objectives become binding (GHG domestic reduction target of at least 55% compared to 1990 levels by 2030). Following the recent enactment of the Monitoring, Reporting, and Verification Regulation for maritime transport, maritime activities are now included in this trading system, mandating emissions from specific ship types to be computed. 

The implementation of the regulation will follow a phased timeline, initially focusing on monitoring procedures. Subsequently, a carbon trading system will be introduced. The rollout schedule will vary based on emission type and ship characteristics. Initially monitoring CO2 emissions, as they constitute the majority of greenhouse gas emissions from maritime transport. CO2 emissions will be included in the EU-ETS in 2024, followed by the monitoring of methane (CH4) and nitrous oxide (N2O) emissions. From 2026 onwards, methane and nitrous oxide will be included in the EU-ETS. Initially, the regulation applies to cargo or passenger ships of 5,000 GT and above, later extending coverage to offshore vessels of more than 5000 GT and smaller ships between 400-5000 GT from January 1, 2025. The initial monitoring will be extended to the EU-ETS in 2024 (for cargo/passenger ships of 5,000+ GT), and in 2027 (offshore and general cargo ships 400-5000 GT).

Companies are obligated to report aggregated emissions data at the company level to the relevant authority and the EU Commission by March 31 each year. Compliance responsibility rests with the shipping company, requiring them to surrender European Union allowances (EUAs) and bear the associated costs. The shipping company is responsible for defining the monitoring plan for fuel consumption calculation for each vessel under its purview. Similar to the IMO regulations, entities involved in shipping operations are responsible for compliance. Ship owners, operators, and manufacturers must invest in emission reduction technologies, transition to alternative fuels, and adhere to the IMO’s emission reduction targets. Consequently, ship owners face a complex set of challenges and opportunities due to the proposed amendments aiming for zero-emission shipping. Adapting to these changes will necessitate significant investments, adherence to new regulations, operational adjustments, and proactive engagement in long-term planning and collaborations.

How will these regulations specifically affect the tugboat sector?

Having explored the regulations impacting the maritime industry, it’s essential to examine their direct implications for the tugboat sector. These rules carry diverse effects across various facets of shipping, making it crucial to understand their specific influence on tugboats. Let’s delve into how these regulations manifest as challenges and transformations within the tugboat industry. 

Starting January 2025, tugboats exceeding 400 gross tonnage (GT) that operate offshore and fall within the specified criteria will be subject to the EU-MRV. This scheme necessitates the measurement, reporting, and verification of emissions for vessels operating within the European Union. Like other vessels, the monitoring focuses on carbon dioxide (CO2) emissions and later extends to methane (CH4) and nitrous oxide (N2O) emissions. From 2027, the tugboats exceeding 400 GT will be subject to the ETS scheme. Not only does this mean monitoring, reporting, and verifying their vessels’ emissions, they also need to purchase and surrender emission allowances (EUAs) equivalent to their vessel’s emissions. This incurs costs as they may need to buy additional allowances if their emissions exceed their allocated cap. 

Similar to the EU regulations, IMO regulations require tugboat operators to track their Energy Efficiency Existing Ship Index (EEXI) ratings for tugs exceeding 400 GT. However, instead of being subject to carbon pricing, the IMO focuses on improving the environmental friendliness of ships. If ships score lower than average on their annual operational carbon intensity indicator (CII), they are obliged to improve in the next three years (if scoring D – minor inferior) or in the next year (if scoring E – inferior performance level).

So, is the magic number 400 GT? It appears that these regulations were not designed with tugboats in mind. Smaller tugboats, falling below the 400 gross tonnage (GT) mark, constitute a more substantial portion of the tugboat fleet compared to larger vessels. Further, the adaptation of these regulations to tugboats might present challenges due to their operational uniqueness, which might not fit the standard emissions monitoring criteria designed for larger vessels. However, the European Commission has expressed its intention to expand the scope of application over time and is planning to present a report to the European Parliament and to the European Council by 31 December 2026. By examining the feasibility of expanding the EU-ETS to smaller ships. Thus, despite the EU-ETS regulation not aiming at tugboats yet, it seems this will be likely as it increases its scope.

What challenges do tugboat operators face to implement or abide by these regulations?

The tugboat sector faces several significant challenges in implementing and adhering to the evolving maritime regulations. Tugboats, known for their distinct operational nature characterized by short bursts of high-intensity activities, encounter difficulties in complying with standardized emission metrics tailored for larger vessels. Traditional emission-tracking metrics, like the GT (Gross Tonnage) to fuel consumption ratio, do not accurately reflect the varying power and fuel consumption levels among tugboats.

Compliance becomes a complex puzzle for tugboat operators due to regulations like the Energy Efficiency Existing Ship Index (EEXI), the EU-Monitoring, Reporting, and Verification (EU-MRV) scheme, and potential expansions of the EU Emissions Trading System (EU-ETS). These regulations, initially designed for larger vessels, lack the specificity needed to precisely monitor and report tugboat emissions. Implementing emission-tracking systems poses financial and technological hurdles, with high upfront costs and the challenge of integrating new technologies into older tugboat models. 

The tugboat sector’s unique operational profiles require tailored emission reduction practices distinct from long-distance vessels. Adapting to upcoming frameworks, such as the IMO’s fuel standard and market-based measures, requires significant fleet and infrastructure adjustments. Additionally, the tugboat industry must prepare for potential expansions of regulations, as the European Commission explores widening the scope of the EU-ETS to smaller ships.

How maritime data and LionRock can help overcome these challenges

In navigating the challenges posed by evolving maritime regulations, data and innovative solutions like LionRock emerge as instrumental tools for the tugboat sector. With a crucial aspect of compliance being the measurement and tracking of fleet emissions, LionRock offers a crucial solution. Its capability to effectively monitor fuel consumption allows for accurate and comprehensive emission data collection, enabling tugboat operators to meet regulatory requirements in a cost-efficient manner.

Tugboat operators are dealing with the need to comply with evolving global and regional regulations aiming for emissions reductions in the maritime sector. Challenges revolve around aligning unique operational profiles with standardized regulations, investing in cost-efficient technologies, and overcoming financial and technological barriers to accurately measure and reduce emissions. LionRock Maritime addresses these challenges by providing tailored data analytics, predictive models, and compliance strategies to aid tugboat companies in their journey towards decarbonization while ensuring operational efficiency and market competitiveness.

As maritime regulations continue evolving, the tugboat industry may inevitably face an extended scope of compliance. While current regulations might not directly impact smaller tugboats, anticipating future regulatory convergence is crucial. Tugboat operators should proactively increase fuel efficiency to prepare for forthcoming mandates. Reducing fuel consumption aids environmental sustainability and positions companies favorably for future compliance. Operating with increased fuel efficiency ensures a competitive edge and readiness for the changing industry.

You can schedule a meeting with our representatives and get a consultation on how you can achieve a better operational efficiency: Schedule a Call now.

Does your Towage Company need Assistance on the IMO Decarbonization efforts?

Tugboat operators facing the complexities of new IMO and EU emissions regulations can find a reliable ally in LionRock. Our expertise in maritime data and analytics offers the perfect solution, such as our Waste Free Shipping solution, for efficient compliance and enhanced operational performance. Don’t let regulatory challenges hinder your progress. Partner with LionRock to future-proof your fleet and thrive in the evolving maritime landscape. Contact us now to set your course for success.

Request a Demo

Frequently Asked Questions

What are the major global regulations driving emission reduction in the shipping industry?

The shipping industry faces transformative changes due to global regulations set by the International Maritime Organization (IMO) and regional mandates like the European Union's Emission Trading System (EU-ETS). The IMO aims for net-zero greenhouse gas emissions by 2050, setting a 40% reduction target by 2030. Ships must calculate their Existing Ship Index (EEXI) and report operational carbon intensity indicators (CII) starting January 1, 2023, with more stringent measures planned by 2025. The EU-ETS, focusing on a 55% reduction in GHG by 2030, involves phased monitoring and carbon trading starting in 2024, initially for larger vessels, later extending to smaller ships.

How will global regulations on decarbonization affect the tugboat sector?

Tugboats above 400 GT operating offshore will be subject to the EU-MRV by January 2025, mandating emissions monitoring and later carbon trading by 2027. Similarly, tugboats exceeding 400 GT need to track their EEXI ratings under IMO regulations. The unique operational nature of smaller tugboats and the regulations designed for larger vessels pose challenges for their adaptation. However, the EU intends to expand regulations to smaller ships by 2026-2027.

What challenges do tugboat operators face in implementing current regulations on decarbonization?

Tugboat operators encounter difficulties aligning their operations with standardized metrics intended for larger vessels. The complexity of emissions tracking systems, high costs, and technological integration into older tugboat models hinder compliance. Tailored emission reduction practices and infrastructure adjustments pose further challenges.

How can data and LionRock assist tugboat operators in meeting regulatory requirements on decarbonization?

In addressing evolving regulations, LionRock offers crucial data analytics and predictive models for efficient monitoring of fleet emissions. This aids tugboat companies in accurate emission's measurement, compliance, and transitioning towards decarbonization. Increasing fuel efficiency proactively ensures preparedness for upcoming compliance, aligning companies with future regulatory changes.

References

Related Posts

The Path to Decarbonization: Tracking CO2 Emissions from Tugboats

By
January 26, 2024

Category: Maritime Decarbonization and Emissions

Maritime co2 emissions from Ships Decarbonisation for Tugboats - LionRock Maritime
Photo by Anton Khatkevich

Decarbonization Journey: Monitoring Tugboat CO2 Emissions in Ports


Tracking the journey towards reduced shipping emissions, through tugboats.

The effects of climate change are increasing the urgency of all sectors to curb their emissions, including the maritime industry. Organizational bodies and governments are increasing the pressure and incentive to do so. The International Maritime Organization (IMO) has set net-zero greenhouse gas emission goals by 2050, and the EU-ETS system has enacted fees for excessive maritime CO2 emissions. With these high goals, smaller pieces of shipping, such as tugboats, are often overshadowed by larger vessels. Yet, tugboats are an opportunity for substantial reductions in shipping emissions.

CO2 Emissions in Ports Example
Relative emissions by vessel type based on a study Levelton in 2002 on the emissions of vessels in British Colombia and Washington State

A Critical Path to Sustainability: Measurement and Monitoring

International waste requires an international approach. That’s why organizations such as the IMO have instated the 2050 goal, with checkpoints along the way. The soonest checkpoint is 2030, with a 40% reduction in greenhouse gas emissions as compared to 2008.  In addition to international commitments, local ports have also become focal points for emissions reductions.  

 

Achieving these goals has its own set of challenges between operational, technical, and financial barriers. For ports, these challenges often center around upgrading infrastructure and implementing advanced emissions-reducing technologies, while being transparent about the success of these efforts. 

 

The unique challenges for towage companies in this respect include issues of operational efficiency and cost barriers. Energy-efficient technologies typically come with high upfront costs, making it challenging to align with short-term business objectives.

 

While facing these barriers, tugboat companies must also comply with new 2023 regulations. These operators are required to track their Energy Efficiency Existing Ship Index (EEXI) ratings, though only for their tugs exceeding 400 GT. Moreover, offshore vessels over 400 GT (which a selection of tugs will fall under) operating in the EU will also be subjected to the EU-MRV scheme to measure and report emissions.

 

Accurate measurement and monitoring of tugboat decarbonization is crucial for carbon reduction. In order to reduce emissions from ships, they need to be tracked, recorded, and monitored to accurately report numbers and define the best reduction practices. 

 

The unique characteristics of tugboats and their varying operations make compliance with standard regulations like EEXI and EU-MRV challenging. These systems often look at the power used per the size of the vessel. Tugboats, however, are typically comparable in size, but have strong variance in power (and fuel consumption) which means a GT to fuel consumption is meaningless for this class.  For tugboats, transitioning to lower emissions requires detailed understanding of these ships’ unique operational profiles. Tugboats operate in short bursts of high-intensity, meaning that traditional metrics meant for long-distance vessels are not entirely transferable. To ensure this data is relevant and actionable, it must be tailored to the tugboats themselves.

Certification and Compliance: Ensuring a Sustainable Legacy

Validating Green Milestones

Certification allows for proof of sustainable progress. This means standardized metrics for emissions measurement and reporting are essential. The industry relies on tools like the International Maritime Organization’s (IMO) Data Collection System for fuel oil consumption of ships to guide this process. These systems ensure that emission reductions are not just claimed, but verified and recognized globally, contributing to a transparent and accountable shift towards greener operations.

 

Adhering to a Greener Code

Compliance with regulations, such as the IMO’s upcoming EEXI and CII metrics, anchors sustainable practices in legality. Tugboat operators are required to keep pace with these regulations, which act as both directives and benchmarks for the industry’s environmental efforts. The EEXI serves as a measure of a ship’s energy efficiency, while the CII tracks the operational carbon intensity. These regulations form a framework that compels operators to invest in cleaner technologies and operational practices that reduce emissions, ensuring a collective move towards a greener maritime future.

Decarbonizing Ports: Overcoming Challenges in Tugboat Emission Tracking

Tracking emissions is a necessary step towards a greener shipping industry. However, tracking emissions on tugboats is certainly not an overnight process. Operational, financial, and technological barriers have all slowed down the process at one point or another. 

 

Certain equipment used to track emissions can be bulky or expensive. With a 25-year average lifespan, there may not be a lot of incentive to spend the money, or have a tugboat out of operation, for an older boat. This slows down both port decarbonization, and reaching the IMO goals. 

 

Not all tugboat technology has been able to combat these issues, while ensuring accurate and beneficial information for the company. Spending time and money on soon-to-be outdated technology isn’t an attractive company decision. However, as the shift to greener ports quickens, so have technological adaptations. The barriers to emission tracking are all connected. By improving one area, technology, the other burdens, financial and operational, become easier. 

 

To comply with the regulatory guidelines, tugboat companies need access to quality technology. Luckily for them, it’s easy to access. 

LionRock Maritime's Vanguard Role in Green Towage

New emission goals cannot be met with old methods. To meet the IMO’s 40% reduction target by 2030, tugboat operators must improve their EEXI and CII metrics as fast as new technology allows them too. This is why new, advanced data is an essential part of reducing port emissions for towage companies. 

 

Companies such as LionRock Maritime are paving the way in maritime decarbonization with data-driven solutions. They use technology, algorithms, and data in tailor-made offerings for towage companies, providing operations with the necessary data analytics to establish accurate emission baselines. Their packages, such as “Waste Free Shipping” help towage companies by lowering costs, and help the environment by lowering carbon emissions. No initial devices or investments are needed to obtain it, meaning that company tugs don’t have to sit out of operation. LionRock Maritime helps lower a financial barrier to emission tracking by using their new technology. With them, companies are able to align their strategies with IMO standards with a transparent data-driven approach. 

Innovative Solutions for Enhanced Operational Efficiency

Understanding the distinct energy patterns of tugboats is critical for achieving emission reductions. LionRock Maritime understands this importance in their “Port Exploration” package. The goal of this package is to reduce fuel consumption, specifically in tugboat services. Using LionRock developed algorithms and predictive models, optimal route planning and fuel consumption analytics are made easily accessible. This tool empowers companies to make real-time decisions that can drastically reduce emissions. When integrated into a towage company’s existing operational framework, the technological tool encourages more efficient tugboat sailing behaviors without imposing a burden on management teams. LionRock Maritime works with tugboat companies, to take the path to lower emissions and save costs together.

You can schedule a meeting with our representatives and get a consultation on how you can achieve a better operational efficiency: Schedule a Call now.

Strategic Compliance and Market Competitiveness

Compliance with evolving regulations is not just about adherence in business, it’s’ about a competitive edge. LionRock Maritime’s insights into towage markets and operational benchmarks empower operations to exceed regulatory standards, enhancing their market position. By providing a clear roadmap for sustainable growth and operational excellence, LionRock Maritime’s services support tugboat sector operators in forming a legacy of sustainability.

Navigating Towards a Greener Maritime Future

Maritime decarbonization needs to be addressed from all angles. This means that ports, and the role that tugboats play in international shipping, are as important to the environmental movement as any. By using and supplying companies with the data and technology they need to track and lower their carbon emissions, steps are taken to meet the IMO’s goals. LionRock Maritime helps with their “Waste Free Shipping” Report to do this through their highly developed and easily accessible packages, setting a sustainability standard within the maritime sector, through tugboats.

 

If you want to take your tugboat operations towards a more efficient, eco-friendly horizon, contact LionRock Maritime to chart your course towards maritime decarbonization.  

Request a Demo

References

Frequently Asked Questions

What role do emissions from ships play in global climate change?

Ship emissions contribute significantly to global greenhouse gas emissions, with maritime transport emitting around 940 million tonnes of CO2 annually. This represents about 2.5% of global greenhouse gas emissions, making it a critical sector to target for decarbonization efforts to combat climate change.

How can maritime CO2 emissions be measured and reduced effectively?

Maritime CO2 emissions can be measured using tools like the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII). Reducing these emissions can involve adopting cleaner fuels, improving operational efficiency, and investing in new technologies such as alternative propulsion systems.

What is maritime decarbonization, and why is it important?

Maritime decarbonization refers to the industry's efforts to reduce carbon emissions from ships, aiming for a more sustainable future. It's significant because the maritime sector is a significant contributor to global emissions, and reducing these emissions is vital to meeting international climate goals and preventing environmental damage.

Can you explain the regulatory framework guiding maritime decarbonization?

The International Maritime Organization (IMO) leads the regulatory framework for maritime decarbonization, setting ambitious targets to cut greenhouse gas emissions from international shipping to net-zero by 2050 compared to 2008 levels. Compliance with these regulations is enforced through measures like the EEXI and CII, which promote energy efficiency and lower carbon footprints.

Related Posts

Lionrock Logo Centered 2022

Through cutting edge data technology you will get immediate and unprecedented insight into your towage businesses in any port in the world, including your own.

[email protected]
+31 (0)6 144 59 097

Company

Services

Legal

© 2024 LionRock Maritime