Bloomberg BusinessWeek – European Parliament Rejects Proposal for Ship-Recycling Levy

(Written by Jonathan Stearns)

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18 April 2013 – The European Parliament threw out a proposal to impose a ship-recycling levy on commercial vessels calling at ports in Europe after the industry objected.

The European Union assembly in Strasbourg, France, today rejected its environment committee’s recommendation to insert the tax into draft EU legislation meant to limit the risks of health and environmental damage from the dismantling of vessels.

In vetoing the levy by a vote of 299 to 292, the EU Parliament called instead on the bloc’s regulators to propose by the end of 2015 an “incentive-based system” to encourage safe ship recycling. The tax recommended by the assembly’s environment committee last month would have been used to fund the recycling of vessels and applied to ships of all flags calling at ports in the 27-nation EU.

After the environment committee’s proposal, international shipowners’ organizations said the provision “is an unacceptable tax on trade and will cause grave offense to the EU’s trading partners.”

Draft ship-recycling legislation was proposed last year by the European Commission, the EU’s Brussels-based regulatory arm, which didn’t include a provision on a levy. The EU Parliament added other amendments today to the commission proposal, which must also be approved by the bloc’s national governments.

EU governments have yet to give their verdict on the commission proposal. Any differences between governments and the EU Parliament would have to be ironed out in negotiations before a final agreement.