The Monitoring, Reporting, and Verification (MRV) system is a regulatory framework developed by the European Union (EU) to ensure transparency and accountability in greenhouse gas (GHG) emissions, like carbon dioxide (CO₂), and other air pollutants such as methane (CH₄) and nitrous oxide (N₂O), from ships calling at EEA ports. Introduced as part of global efforts to mitigate climate change, the MRV system supports decarbonisation strategies by providing accurate, reliable, and independently verified emissions data.

This system has been implemented in the maritime transport sector since the 1^st of January 2018, under Regulation (EU) 2015/757 of the European Parliament and of the Council of 29^th of April 2015. The MRV system aims to monitor CO₂, CH₄ and N₂O emissions for each ship, along with fuel consumption and other key operational parameters, such as distance travelled, cargo carried and time at sea. This data must be reported transparently, and the ship’s compliance must be verified through accredited third-party independent verification. This regulation appears as a first step towards decarbonisation of the maritime transport sector in the EU.

The EU MRV (Regulation (EU) 2015/757) applies to ships of 5,000 gross tonnage (GT) and above calling at ports within the European Economic Area (EEA). From the 1^st of January 2025 onwards, with the amended MRV regulation, it also applies to general cargo ships between 400 and 5000 GT as well as offshore ships of 400 GT and above.

Ship operators collect data on a per-voyage basis on the port of departure and arrival and respective hour of departure and arrival, fuel consumption by type, respective emission factors, CO₂, CH₄ and N₂O emissions, distance travelled, time spent at sea, cargo carried or capacity utilisation and transport work.

On an annual basis, the collection of data encompasses the amount and emission factor for each type of fuel consumed in total, the aggregated CO₂, CH₄ and N₂O emissions within scope of this regulation, the aggregated CO₂, CH₄ and N₂O emissions from all voyages between ports under a Member State’s jurisdiction, the aggregated CO₂, CH₄ and N₂O emissions from all voyages which departed from ports under a Member State’s jurisdiction, the aggregated CO₂, CH₄ and N₂O emissions from all voyages to ports under a Member State’s jurisdiction, the CO₂, CH₄ and N₂O emissions which occurred within ports under a Member State’s jurisdiction at berth, total distance travelled, total time spent at sea, total transport work and average energy efficiency.

The data collection must be done according to the approved MRV Monitoring Plan of each ship. Under the EU MRV, the data is reported yearly on an emissions report in the Thetis portal and verified by accredited verifiers. The verified and approved reports are then submitted to the European Commission and, where the emissions report fulfils the requirements set in this regulation, the verifiers’ issue, based on the verification report, is a document of compliance for the ship.

Compliance with MRV regulations ensures operational transparency, supports decarbonization strategies, and enables benchmarking of fleet performance. The system provides critical data for assessing the effectiveness of emissions reduction initiatives and encourages the industry to adopt energy-efficient technologies, aligning with global environmental goals. Moreover, it fosters transparency by making verified emissions data publicly available without anonymity, reinforcing accountability in the maritime industry and aligning with broader environmental objectives.

The EU ETS (European Union Emissions Trading System) was established in 2005 by the European Union, becoming the world’s largest carbon market. Its primary goal is to combat climate change by promoting the effective and cost-efficient reduction of greenhouse gas (GHG) emissions.

Developed as part of the European Union’s climate policies with the Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003, and currently aligned with the Paris Agreement, the EU ETS uses a market-based approach to encourage the transition to cleaner and more sustainable practices. The expansion of the EU ETS to maritime transport resulted from the “Fit for 55” package, which amended the EU ETS Directive with modifications established by Directive (EU) 2023/957. The system aims to progressively reduce GHG emissions in sectors responsible for approximately 40% of total EU emissions, contributing to the EU’s target of achieving climate neutrality by 2050.

Since 2024, passenger and cargo ships of 5000 GT or above are required to adhere to the EU ETS Directive, which in 2025 covers 40% of the emissions recorded in the EU MRV referent to 2024 by emission allowances. Due to the progressive nature of this phase, 70% of 2025 emissions must be covered by emission permits in 2026; and starting in 2027, this number will rise to 100%. In 2027 this directive will also encompass offshore ships of 5000 GT and above.

The EU ETS Directive covers the following emissions from maritime transport with some exemptions:

• 100% of emissions from ships on voyages between two ports within an EU Member State’s jurisdiction;
• 100% of emissions from ships within a port under an EU Member State’s jurisdiction;
• 50% of emissions from ships on voyages departing from an EU Member State’s port and arriving at a port outside the jurisdiction of a Member State;
• 50% of emissions from ships on voyages departing from a port outside the jurisdiction of a Member State and arriving at a port within an EU Member State’s jurisdiction.

Shipping companies must purchase and surrender EU ETS emission allowances in the Union Registry for each tonne of reported CO₂ (or CO₂ equivalent, for activities after 1 January 2026, since there is the addition in scope of CH₄ and N₂O) emitted within the scope of the EU ETS, equal to the annual aggregated emissions at company level. The EU ETS derives its data from the data monitored under the verified Company Annual Emissions Report (CER) resulting from the MRV Maritime Regulation, although it might deviate partially due to differences in scope and applicable derogations. Maritime transport emissions are included in the general ETS cap, which sets the maximum allowable GHG emissions under the system. This cap decreases over time to ensure that all ETS sectors collectively contribute to the EU’s climate targets.

The EU Emissions Trading System (EU ETS) is a cornerstone of the EU’s climate policy, aiming to reduce greenhouse gas emissions through a cap-and-trade mechanism. By setting a gradually decreasing emissions cap, it creates financial incentives for companies to invest in cleaner technologies, making it a key tool for achieving the EU’s climate targets.

For the maritime sector, the inclusion in the EU ETS increases the operational costs of shipping companies relative to the emission of GHG, therefore incentivizing fuel efficiency, the adoption of cleaner fuels, and investment in alternative propulsion technologies. By integrating maritime transport into the EU ETS, the sector is now subject to stricter emissions control, aligning it with broader EU climate goals and pushing it toward greater sustainability.

Within the Fit For 55 package, the European Union created the Fuel EU Maritime Regulation, (Regulation EU 2023/1805) in order to incentivize GHG emission intensity reduction in the maritime sector. This regulation sees a progressive increase in the target restrictions on emission intensity and reinforces compliance of shipping companies with the European Green Deal’s objectives by imposing forceful financial sanctions in the case of non-compliance.

Primarily oriented by Regulation (EU) 2023/1805, which is part of the Fit For 55 package, FuelEU Maritime aims to accelerate the transition to renewable and low-carbon fuels in maritime transport and to reduce ships yearly average GHG intensity. It seeks to decarbonise the industry, creates a regulatory framework that encourages the adoption of cleaner fuels and energy-efficient technologies reducing therefore the dependence on fossil fuels, and aims to position the EU as a global leader in sustainable maritime transport.

This regulation is mandatory for ships above 5000 GT calling at European ports, regardless of their flag. and includes:

• 100% of the energy used from ships calling at an EU/EEA port for voyages within the EU/EEA (intra-EU)
• 50% of the energy used from voyages to or from EU ports (extra-EU/EEA)
• 100% of the energy used when ships are at berth in EU/EEA ports.

Fuel EU is a multi-pronged approach, setting maximum targets for the average yearly GHG intensity of the energy used aboard, and secondary targets, like a future minimum use of RFNBO’s and the requirement of OPS systems in some ship types.

The Fuel EU Regulation is fully applied from the 1^st of January 2025, (except for Articles 8 and 9 on monitoring plans that were applied from August 2024) with a delay in the inclusion of Norway and Iceland due to delays in the incorporation of FuelEU in the EEA Agreement.

In a similar fashion to EU MRV the ship operators have to collect data on a per-voyage basis on information. For Fuel EU is required to monitor and report information such as the port of departure and arrival and respective hour of departure and arrival and duration of stay at berth, fuel consumption by type while at berth and sea, and respective Well-to-Tank, Tank-to-Wake and Well-to-Wake emission factors encompassing all GHG, amount of energy supplied to the ship by the OPS (Onshore Power Supply) system or exceptions to this, ship’s ice class, voyages information in ice conditions and any renewable or low-carbon fuel usage at berth or sea.

The mandatory data collection for Fuel EU must be done according to the previously submitted and approved FuelEU Monitoring Plan of each ship. Under the Fuel EU regulation, data is reported annually on a Fuel EU report in the Thetis portal and verified by accredited verifiers. The verified and approved reports, which encompass the data previously mentioned and each ship’s GHG intensity and compliance status are then submitted to the European Commission and, where the Fuel EU Report fulfils the requirements set in this regulation, the verifiers issue, based on the verification report, a FuelEU document of compliance for the ship.

The main focus of this regulation limits the annual average GHG intensity of each ship to a gradually decreasing limit as time goes by, with a mandatory decrease respective to 91,16 [gCO₂eq./MJ] of:

• 2% by 2025;
• 6% by 2030;
• 14,5% by 2035;
• 31% by 2040;
• 62% by 2045;
• and 80% by 2050.

There are also secondary targets, such as a requirement and incentive to use RFNBOs: if RFNBO usage remains below 1% of total fuel consumption by 2031, a mandatory requirement of at least 2% RFNBO will take effect from 1 January 2034. However, this requirement will be waived if RFNBO usage reaches or exceeds 2% by 2033; Another target of this regulation is the use of OPS with mandatory use for passenger ships and container ships staying for more than two hours​ in a port from the 1^st of January 2030 onwards.

Fuel EU Maritime Regulation is a vital step in addressing climate change, reducing air pollution in coastal regions, fostering technological innovation, and consolidating the EU’s leadership in sustainable maritime transport by pushing for the reduction of GHG intensity in the shipping sector. This regulation can have a major impact on the operational costs of ships since non-compliance with the set targets is heavily fined (with each excess ton of CO₂ equivalent costing 2400€) and can surmount ever-increasing fines. To maintain compliance and avoid financial penalties, shipping companies are incentivised to use RFNBOs, use biofuels with sustainability certificates, implement energy-efficient technologies and zero-emission technologies, and use the pooling of compliance, and banking and borrowing of compliance surplus mechanisms.

The Ship Energy Efficiency Management Plan (SEEMP) is an operational and management tool established by the IMO under Annex VI of the MARPOL Convention. Introduced in 2011 (MEPC.203(62)) and enforced from 2013 onwards, the requirement for ships to have a SEEMP aims to enhance energy efficiency in shipping through operational measures and management practices. The introduction of SEEMP Part III (MEPC.328(76)) further strengthens this goal by linking the SEEMP to the Carbon Intensity Indicator (CII), ensuring continuous monitoring and improvement of a ship’s carbon footprint.

The SEEMP is mandatory for all ships of 400 gross tonnage (GT) and above engaged in international voyages, as stipulated by MARPOL Annex VI. Furthermore, ship operators and owners are responsible for ensuring the implementation and regular updating of the SEEMP, maintaining compliance with applicable regulations.

Divided into three main parts (Part I, Part II and Part III), the SEEMP fosters a culture of continuous improvement and technological innovation, encouraging the maritime sector to adopt practices that simultaneously meet regulatory requirements, reduce operational costs, and mitigate environmental impacts. Part I of the SEEMP applies to all ships ≥400 GT engaged in international voyages, while Part II and Part III apply to ships of 5,000 GT and above.

Introduced in 2013, SEEMP Part I requires ships to have a ship-specific energy efficiency plan that outlines strategies such as voyage optimization, hull and propeller maintenance, speed and power adjustments, and fuel management. While having a SEEMP Part I is mandatory, it does not require approval by flag states or classification societies.

SEEMP Part II was enforced in 2019 and mandates participation in the IMO DCS. Ships that have this part in their SEEMP must collect and report fuel consumption (by type), distance travelled, hours underway and several technical characteristics of the ships on an annual basis. This data is verified by the flag state and then submitted to the IMO for global monitoring. Unlike Part I, SEEMP Part II requires verification and approval by the flag state or a recognized organization (RO), under the IMO DCS system.

Finally, introduced in 2023, SEEMP Part III focuses on compliance with the Carbon Intensity Indicator (CII). It requires ships to maintain an operational carbon intensity plan, ensuring continuous improvement in CO₂ emissions per transport work. Ships rated D for three consecutive years or E for one year must submit a corrective action plan. SEEMP Part III is subject to annual verification to ensure ongoing compliance with IMO decarbonization targets.

The SEEMP is crucial for improving the operational efficiency of ships and ensuring compliance with IMO regulations. It provides a structured approach for shipowners and operators to monitor and optimize fuel consumption, reduce CO₂ emissions, and enhance overall vessel performance. The introduction of SEEMP Part III, now directly ties into the Carbon Intensity Indicator (CII), requiring continuous efficiency improvements to maintain regulatory compliance. As environmental regulations become stricter, SEEMP plays a key role in driving sustainable practices in the maritime industry.

The Carbon Intensity Indicator (CII) is an environmental metric introduced by the IMO under MARPOL Annex VI to assess and improve the operational performance of ships. Effective from the 1^st of January 2023, it assigns vessels an annual A to E rating based on their grams of CO₂ emitted per cargo-carrying capacity and nautical mile (gCO₂/dwt-nm or gCO₂/GT-nm). Ships rated D for three consecutive years or E in any given year must submit a corrective action plan to improve efficiency, whilst ships rated A or B may have benefits. The CII is part of the IMO’s strategy to achieve net-zero GHG emissions from shipping by and around 2050 and encourages energy-saving measures and optimized voyage planning.

The CII applies to ships with 5,000 GT and above, covering a significant portion of the international fleet, such as bulk carriers, tankers, cruise ships and container ships. This metric is calculated annually for each ship by the flag state or Recognized Organization RO with the values reported and verified in the IMO DCS, and is officially assigned in the Statement of Compliance (SoC-DCS).

The CII involves the annual calculation of CO₂ emissions per transport work (gCO₂/ton-mile or gCO₂/GT-mile, depending on ship type) using fuel data reported by the shipowners/operator and verified under the IMO DCS. By March 31 of each year, shipowners must submit verified DCS data to their flag state or RO, which then determines the official CII value and assigns an A–E rating. The Statement of Compliance – Fuel Oil Consumption Reporting (SoC-DCS), issued by May 31, documents this rating and must be retained onboard for at least five years. Ships rated A, B, or C are compliant but should adopt measures to maintain efficiency. Ships rated D for three consecutive years or E in any given year are required to include a Corrective Action Plan (CAP) in SEEMP Part III, which must be approved by the flag state/RO. These ships must implement efficiency strategies and update SEEMP Part III accordingly. Compliance is subject to flag state verification, Port State Control (PSC) inspections, and potential enforcement actions for persistent underperformance.

The CII is a critical regulatory metric driving the maritime sector toward decarbonization and operational efficiency. It directly impacts shipowners, operators and charterers by mandating annual assessments of CO₂ emissions per transport work and assigning an A–E rating. Compliance with progressively stringent CII targets is essential to avoid corrective action requirements, market disadvantages, and potential enforcement measures by flag states and Port State Control (PSC). A favourable CII rating enhances commercial competitiveness, chartering opportunities, and regulatory standing, while persistent underperformance may result in higher operational costs, reduced asset value, and market exclusion as industry stakeholders prioritize sustainability in vessel selection.

The Energy Efficiency Design Index (EEDI) is a mandatory regulatory metric under MARPOL Annex VI, Regulation 20 (calculation of attained EEDI) and Regulation 21 (required EEDI), aimed at improving the energy efficiency of new ships and reducing greenhouse gas (GHG) emissions. It establishes a quantifiable and verifiable CO₂ emission benchmark per transport work (gCO₂/ton-mile), requiring ship designs to meet progressively stricter efficiency standards. As the first legally binding CO₂ reduction measure for the global shipping industry, the EEDI is a key component of the IMO’s strategy to achieve net-zero emissions by and around 2050, driving innovation in vessel design and propulsion technology.

The EEDI applies to new ships of 400 GT and above engaged in international trade, covering ship types such as bulk carriers, tankers, containerships, LNG carriers, and passenger ships, among others (the EEDI does not apply to warships, naval auxiliaries, fishing vessels, and some specialized ship types.). Compliance is required for vessels contracted on or after 1 January 2013, with progressively stringent CO₂ reduction targets enforced through phased implementation. From the 1^st of January 2025 onwards, with phase 3 EEDI effective, all new builds must ensure a reduction of at least 30% compared with the initial baseline, with some ships having even stricter requirements. Each vessel’s EEDI is calculated based on its installed power, fuel consumption, design speed, and cargo-carrying capacity, ensuring that newbuilds achieve improved fuel efficiency compared to baseline reference values. Vessels falling outside the scope of EEDI must still comply with broader efficiency regulations under the IMO’s Ship Energy Efficiency Management Plan (SEEMP) framework.

To comply with EEDI regulations, new ships must achieve an EEDI value below the IMO-mandated reference line, calculated using a standard formula that considers CO₂ emissions per unit of transport work. The required EEDI reduction factors are phase-based, with targets increasing in stringency over time—starting at 10% reduction (Phase 1) and progressing to at least 30% (EEDI Phase 3 from 1 January 2025 mandates at least a 30% CO₂ reduction for all ships with and above 400 GT, but some specific ship types must meet even stricter targets of up to 50%) compared to baseline emissions levels. Compliance is demonstrated through the ship’s EEDI Technical File, verified by the flag state or a Recognized Organization (RO), and through the issuance of an International Energy Efficiency Certificate (IEEC). Ships that fail to meet EEDI thresholds must incorporate design modifications such as hull optimization, energy-efficient engines, propulsion improvements, or alternative fuel integration to achieve compliance.

The Energy Efficiency Design Index (EEDI) is a crucial regulatory instrument driving the maritime industry toward lower emissions and improved energy efficiency by setting enforceable CO₂ reduction targets at the design stage. It incentivizes shipbuilders, owners, and designers to adopt innovative energy-efficient technologies, ensuring compliance with both IMO GHG reduction strategies and market-driven sustainability demands. By enforcing gradual CO₂ intensity reductions, the EEDI aligns with the IMO’s decarbonization goals, reduces fuel costs, enhances operational efficiency, and ensures the long-term viability of shipping assets in an increasingly carbon-regulated market.

The Energy Efficiency Existing Ships Index (EEXI) is a mandatory regulatory measure under MARPOL Annex VI, Regulation 25, and introduced by MEPC.328(76). It extends the principles of the Energy Efficiency Design Index (EEDI) to existing ships, ensuring a harmonized approach to improving energy efficiency and reducing greenhouse gas (GHG) emissions across the maritime sector. The EEXI entered into force on 1 November 2022, with compliance becoming mandatory from 1 January 2023. It requires a one-time certification for existing ships based on design parameters unless major modifications affecting energy efficiency occur. By focusing on design efficiency rather than operational performance, the EEXI allows shipowners, operators, and charterers to compare similar ships based on baseline design energy efficiency. Operational efficiency, however, is regulated separately under the Carbon Intensity Indicator (CII), which assesses real-world emissions and fuel consumption. Compliance is crucial for shipowners and operators, as non-compliant vessels may face operational restrictions or market disadvantages, particularly under chartering and financing criteria that prioritize decarbonisation.

The EEXI applies to all existing ships of 400 GT and above engaged in international trade, with a focus on major commercial vessel types, including bulk carriers, tankers, containerships, and LNG carriers. It follows a one-time assessment framework, requiring ships to demonstrate compliance before their first annual survey after 1 January 2023. Unlike CII, which is an annual operational performance metric, EEXI assesses a ship’s technical efficiency based on its design parameters, including installed engine power, propulsion system, and hull characteristics. Vessels that do not meet the required efficiency standards must implement corrective measures, such as Engine Power Limitation (EPL), Shaft Power Limitation (ShaPoLi), or retrofits to improve fuel consumption and emissions performance.

To comply with EEXI regulations, ships must achieve an EEXI value below the reference line defined by IMO, calculated using the same fundamental methodology as EEDI but applied retrospectively to existing vessels. The required EEXI reduction factors are ship-type specific and aligned with the IMO’s CO₂ reduction targets. Compliance is demonstrated through the EEXI Technical File, which includes ship performance data and required efficiency improvements, submitted to the flag state or Recognized Organization (RO) for verification. Ships failing to meet EEXI standards must implement technical modifications to reduce fuel consumption and emissions while maintaining operational viability. The EEXI verification process is tied to the ship’s International Energy Efficiency Certificate (IEEC), which is updated upon approval.

The EEXI is a critical regulatory mechanism ensuring that the global fleet meets minimum energy efficiency standards, driving the transition toward lower emissions and reduced fuel consumption in existing vessels. It compels shipowners to adopt cost-effective efficiency measures, mitigating the environmental impact of older ships without requiring full vessel replacement. The regulation also aligns with charterer and financial institution decarbonization strategies, making compliance essential for maintaining competitiveness in an evolving regulatory and commercial landscape. By enforcing design-based CO₂ intensity reductions, EEXI complements operational measures like CII, reinforcing the IMO’s decarbonization pathway and supporting the long-term goal of achieving a net-zero shipping industry by around 2050.

Energy audits in the maritime sector are systematic assessments of a vessel’s energy consumption, efficiency, and emissions performance, aimed at identifying potential improvements in energy usage and operational performance. As a powerful tool for monitoring and improving energy efficiency, energy audits can provide valuable insights for a ship’s SEEMP, helping shipowners and operators enhance fuel efficiency, reduce CO₂ emissions, and comply with decarbonization targets. With increasing regulatory and market pressure to minimize environmental impact, energy audits play a critical role in optimizing vessel operations, improving chartering competitiveness, and reducing operational costs.

Maritime energy audits apply to all vessel types and fleet operations, with particular relevance for ships subject to EEXI, CII, and SEEMP regulations under IMO’s GHG reduction strategy. These audits are voluntary but widely adopted as part of energy efficiency programs and IMO-aligned best practices. Their scope typically includes propulsion efficiency, auxiliary systems performance, onboard energy management, hull and propeller condition and waste heat recovery. Energy audits can be fleet-wide or vessel-specific, addressing both technical efficiency (design-based improvements) and operational efficiency (such as voyage optimization, slow steaming, and engine load management).

Maritime energy audits are an essential step in the path to achieving cost-effective compliance with maritime environmental regulations and maintaining operational competitiveness in a carbon-regulated market. They help shipowners and operators lower fuel costs, extend vessel lifespan, and meet charterer demands for sustainable shipping. Additionally, energy audits support long-term GHG reduction goals, facilitating the transition to low-carbon fuels, hybrid propulsion systems, and energy-efficient technologies. With increasing pressure from regulators, financial institutions, and cargo owners, proactive energy auditing ensures that vessels remain technically and commercially viable in a rapidly evolving maritime industry.