European shipowners back proposal to solve urgent recycling logjamEuropean shipowners back proposal to solve urgent recycling logjam

In a recent Position Paper, ECSA noted that it could enable owners, based in the European Union (EU), to recycle end-of-life ships at non-OECD facilities in India, Bangladesh and Pakistan. Under current legislation, this breaches the law even when non-OECD facilities advance their standards and comply with the EU Ship Recycling Regulation (SRR) criteria.

ECSA’s acting Secretary General, Sotiris Raptis, and Fanny Lossy, Senior Policy Advisor, Maritime Safety, Environment & Offshore, have outlined the complex backdrop to Seatrade Maritime News. Recycling yards on the Indian subcontinent, as it is known in the recycling business, are off limits for European-based shipping companies for two reasons.

One, despite significant investment and facility upgrades, no yards in the region have yet been approved under the EU SRR framework, although a number of yards have been certified as compliant with the IMO’s Hong Kong Convention by leading classification societies. And two, under the so-called Basel Convention ‘Ban Amendment’, in force since December 2019, no ‘waste’ can be exported from the EU to non-OECD countries.

Even if subcontinent facilities fully comply with the stringent standards of the EU SRR, the European Commission considers that, under the Basel ban, the EU is no longer allowed to add them to its list of approved facilities. Thus, recycling ships there would risk being considered as breaching the Basel Convention.

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A number of  non-OECD facilities have substantially advanced their standards over the past few years. The EU should encourage further progress and should not aim to cut these facilities off the market, Sotiris told Seatrade Maritime News. “We welcome this proposal as it keeps the door open,” he said.

The Commission’s proposal would clarify the legal framework. EU-flagged ships becoming waste outside the EU could be recycled at facilities in non-OECD countries provided that those yards were approved under the EU SRR. Importantly, what matters is not whether a company is based in the EU, but whether EU-flagged ships become waste outside the EU.

Recycling would still have to take place in an EU-approved facility, and so the Commission’s proposal would still provide a significant incentive for subcontinent recycling yards to undertake the necessary upgrades to facilities, toxic waste management procedures, and access to emergency health facilities, as necessary.  

ECSA stated in its Position Paper: “In order for the EU-flagged fleet to be recycled in a safe and environmentally sound manner, the establishment of a European list with adequate capacity is therefore urgently needed, which:

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- contains facilities that meet the requirements of the EU Ship Recycling Regulation;

- includes facilities which can recycle large seagoing vessels;

- is geographically well-balanced, adapted to the needs of an industry operating globally;

- guarantees sufficient recycling capacity and is reflective of the market.”

As things stands, there are no alternatives for the recycling of large vessels, including VLCCs and suezmax tankers, capesize and panamax bulk carriers, and big container ships. Ships like these have to be dismantled by ‘beaching’, a procedure which is perfectly safe provided that it is managed properly. The sector’s poor safety record, however, has specifically been highlighted by lobby groups which claim that the beaching process is substandard and dangerous.

Since China withdrew from the ship dismantling business in 2018, the only other ship recycling location is Aliaga in Turkey, an OECD member where yards are currently full for months ahead, involved in the complex recycling of cruise ships – victims of the pandemic. Most of these vessels are not EU-controlled in any case.

There are no other options for most commercial vessels owned or managed in Europe. Although the EU has approved recycling facilities in Europe, most are relatively small and suitable only for trawlers, workboats, and tenders. Furthermore, there is little appetite for scrap steel in Europe, meaning that the steel would have to be ditched or exported to countries that require it, with adverse effects on both recycling economics, sustainability, and carbon footprints.