Bergen/Oslo March 2-3 EU MRV Group Questions:

FSRU Does EU MRV classified FSRU(s) under Offshore or Shipping?

FSRU: Floating storage & re-gasification units. It's the same principle as an FPSO (floating production
storage and offloading).

The question is to know if the gas for the FSRU or oil for FPSO is considered as a cargo or not.
FSRU may be considered as an LNG carrier. After all, FSRUs are carrying gas from a point A to a
point B. Our point of view is to consider it as a cargo, however, it can also be considered as "offshore
installation activities" and in this case, FSRU may be exempted.

This is a question for the European Commission to answer.

Anchorage Based upon the latest revisions (Nov 2016), clarification on

what is calculated when at anchor?
It depends on activities the ship is performing when it is at anchor. If the ship is involved in commercial
operations in EEA zone and in port limits, then anchoring is considered at port of call. If the ship is at
anchor in waiting area or performing bunkering operations, then it should be considered as a part of
the voyage.

This topic is in under study by the EC.

Are there sanctions and/or repercussions for not meeting the August
31st deadline?
st
For now, no sanctions have been set out in case of non-meeting the 31 August deadline.

Are other regions like Asia, Africagoing to opt-in or develop similar

MRV processes?

Yes, the whole world will be concerned, but under IMO regulations.

What is the EC EU MRV website?

https://ec.europa.eu/clima/policies/transport/shipping_en

Who is responsible for Time-Chartered Vessels?

The shipowner or any other organisation or person, such as the manager or the bareboat charterer,
which has assumed the responsibility for the operation of the ship from the shipowner is responsible
for MRV. In the case of Time Chartered vessel, the responsible company may be the shipowner or the
bareboat charterer.

The information and views provided throughout this document were appropriately researched and are presented as advisory
statements for your consideration. Please contact your own operational and legal advisors regarding your specific business
needs before taking any action based upon this information.
 How do you structure your Verification Fees?
1. Assessment of monitoring plan.
First, we have a fee per company which includes the assessment of the first ship of the first family.

Then if the company has more than one vessel family, a vessel family fee will be applied to the second
family. This fee includes also the assessment of the first ship of the second family.

Finally, a fee per lead ship remaining and fee per sister ship will be applied.

For your information, a vessel family as per Verifavia Shipping, is a combination of ship type, data
transfer system and fuel monitoring methodology.

Bellow a case study

The shipping company X wants a quotation from Verifavia Shipping. In this way, the shipping company
X sends to Verifavia shipping its fleet details as below:

Fleet is made by 12 ships, including 7 Container ships and 5 Bulk Carriers.

Container ships: M/V Alpha, M/V Bravo, M/V Charlie, M/V Delta and M/V Echo are sister ships
(= x5). M/V Foxtrot and M/V Gulf are standalone vessel (=x 2).
Bulk Carriers: M/V Hotel, M/V India and M/V Juliet are sister ships (= x3). M/V Kilo and M/V
Lima are standalone vessel (=x 2).

Verifavia shipping will draw the following conclusions:

Families Names Lead ship Sister ships

M/V Alpha - M/V Bravo - M/V
1 4
Vessel Family A Charlie - M/V Delta - M/V Echo
(Container ships) M/V Foxtrot 1 0
M/V Gulf 1 0
M/V Hotel - M/V India - M/V
1 2
Vessel Family B (Bulk Juliet
Carriers) M/V Kilo 1 0
M/V Lima 1 0
TOTAL 6 6

Accountable entity Quantity Explanations

Fee includes assessment of one ship of
Company fee 1
family A + "vessel family A" fee
Fee includes assessment of one ship of
Vessel family fee 1
family B + "vessel family B" fee
Two lead ships fees are already included
Lead ship fee 4
in company and vessel family fees
Sister ship fee 6 --

2. Verification of emissions reports.

For the verification of emissions reports, it is the same price, whether it is a lead ship or a sister ship.
In the case of the example, Verifavia Shipping will apply 12 x verification fee.

The information and views provided throughout this document were appropriately researched and are presented as advisory
statements for your consideration. Please contact your own operational and legal advisors regarding your specific business
needs before taking any action based upon this information.
 Are there any charter conditions where the DOC holder is not
responsible?

No, as far as we know. Basically, the ship owner is not responsible in case of demise / bareboat charter, as he
does not hold the ISM DOC.

Is Suez Canal bunkering considered in-berth or included in the voyage

report?
The ship is just bunkering, so it is not a port of call as per EU MRV regulation because no commercial
operation is involved. Moreover, Suez Canal is outside EEA area.
In this specific case, the call in Suez Canal for bunkering is not considered as berth but fuel
consumption must be included in the voyage report only if the next port of call is a port of call as per
EU MRV regulation.

Are Oil Installations considered ports for those vessels?

To be answered by the European Commission.

Ships operating in the domestic water space performing more than 300
voyages do not have a Voyage Reporting Requirement, but have the
annual reporting requirement. How does the EU MRV determine/validate
the 300 voyage, voyage reporting exemption?
EU MRV is not the one who determines/validates the 300 voyages exemption of voyage reporting.
Verifavia Shipping is the one who validates the exemption of voyage reporting by checking the
schedules of the ship.

FPSO(s) that remain in port, how do they report voyages? Or are they
exempt from voyage reporting and if so, do the annual reports
compensate for it?
As soon as a FPSO is involved in commercial operations, it must be considered as a tanker ship.

GCU(s) are currently not included, are they going to be?

This is a question for the European Commission to answer.

EU MRV verification does not limit the accreditation verification

organization to specific flag state verification.
No. Verifavia Shipping is accredited by UKAS, the British national accreditation body which allows to
Verifavia Shipping to conduct assessments of monitoring plans and verifications of emissions reports,
regardless the flag state of ships.

Voyages that straddle years, which year do you report the voyage in?
If the voyage starts in 2018 (31 December 2018 and ends on 20 January 2019 for instance), it must be
reported in the 2018 emissions report.

The information and views provided throughout this document were appropriately researched and are presented as advisory
statements for your consideration. Please contact your own operational and legal advisors regarding your specific business
needs before taking any action based upon this information.
 Can you (Verifavia) modify current monitoring plans to meet the new
monitoring plan requirements?
No, we (Verifavia) absolutely do not modify monitoring plans of our customers. We can notify the ship
owner when a requirement has been modified and invite them to change their monitoring plans in
accordance, only.

Assessment of the Monitoring plans require/include?

First, the shipping company makes its first monitoring plan. To perform this task, the shipping
company reviews the regulation 2015/757 and all its delegated and implementing acts.

The first monitoring plan completed, the shipping company sends it with all procedures and referenced
documents to Verifavia Shipping.

Then, Verifavia Shipping assesses this first Monitoring Plan and conducts an on-site visit. When the
monitoring plan is completed, the shipping company can go for all other monitoring plans.

Again, what is required? All procedures and referenced documents described in the Monitoring Plan
and all documents which are relevant the assessment of Monitoring Plan.

Below, all documents required to perform the assessment of MP:

1. Draft MP
2. Ship Energy Efficiency Management Plan (SEEMP)
3. Data flow diagrams
4. Overview of IT landscape
5. Capacity plan and general arrangement plan
6. Piping diagrams (fuel oil filling and transfer, fuel supply and service system)
7. Description of fuel measuring equipment
8. Details of maintenance and control activities performed on the measuring equipment
9. Fuel management procedures including bunkering procedures, fuel handling and treatment
procedures, fuel analysis and testing procedures on-board
10. Any relevant documented procedures

Are there grace periods for those ships that do not normally operate in
EU?

In case of a ship that operates in the EU for the first time, the company shall submit a monitoring plan
to the verifier without undue delay and no later than two months after the ship's first call in an EU port.

The information and views provided throughout this document were appropriately researched and are presented as advisory
statements for your consideration. Please contact your own operational and legal advisors regarding your specific business
needs before taking any action based upon this information.
 What are the expected penalties for not meeting the June 30 2019
deadline?
The EU MRV regulation states Member States should lay down rules on those penalties. Those
penalties should be effective, proportionate and dissuasive. Today, only United Kingdom drawn rules
in case of non-compliance with EU MRV regulation by not showing the DOC during port state control
or inspection.

From CMS Law Now: 02-02-2017

http://www.cms-lawnow.com/ealerts/2017/02/government-consults-on-penalties-for-noncompliance-
with-eu-ship-emissions-reporting

UK consultation on enforcement of the EU Regulation

The EU Regulation is already in force and binding but the precise enforcement process is left to
Member States. The UK Government has published the draft Merchant Shipping (Monitoring,
Reporting and Verification of Carbon Dioxide Emissions) Regulations 2017 (the draft UK
Regulations). The key point to note is that under the proposed UK Regulations a Company could
be made criminally liable.

The potential fines should a Relevant Ship:

(1) enter or leave a port in the United Kingdom without a valid DoC; and/or

(2) fail to keep on board a valid DoC or to present a valid DoC upon inspection,

Are unlimited in England and Wales and subject to the then statutory maximum in
Scotland and Northern Ireland.

For instance the current statutory maximum in Scotland is 10,000.

Importantly, under the draft UK Regulations there are wide powers of enforcement including the
power:

To detain a Relevant Ship by serving it with a detention notice if anyone attempts to navigate it
out of a port without a valid DoC; and

Where a Member State has informed the Secretary of State that it has issued an
expulsion order, refuse entry for the particular Relevant Ship to any port in the UK.

The draft UK Regulations make provision for arbitration in the event that a Company alleges that a
Relevant Ship was improperly detained. In the event that an arbitrator finds in favour of the
Company following detention of a Relevant Ship, compensation will be payable in respect of any
loss suffered in consequence of the detention of the Relevant Ship as the arbitrator thinks fit.

The information and views provided throughout this document were appropriately researched and are presented as advisory
statements for your consideration. Please contact your own operational and legal advisors regarding your specific business
needs before taking any action based upon this information.