Can targeted disclosure regulations facilitate the environmental transition of the shipping sector? : a study on the effect of the EU MRV Regulation on ship emissions

Abstract: This research examines the impact of the EU Monitoring, Reporting, and Verification (MRV) regulation on ship emissions when calling at EU ports. The main question is whether ships that are required to report their emissions emit less due to the regulation. The study utilizes Automatic Identification System (AIS) data on distance sailed, fuel consumption, deadweight tonnage, and gross tonnage to calculate each ship's Annual Efficiency Ratio (AER) value. The value is an index used to describe a ship’s carbon intensity per carrying capacity and distance traveled. An empirical analysis is conducted using the Regression Discontinuity Design (RDD) method to clarify the question. By limiting the analysis to ships with a gross tonnage just above 5,000 and ships with a gross tonnage just below 5,000, the effect of MRV regulation on emissions is isolated. According to the result estimates, it appears that the MRV regulation does not have a significant impact on ship emissions. In fact, if any effect exists, it might be positive. Nevertheless, it is essential to note that the results are not statistically significant.