Europolitics – Rapporteur proposes recycling fund

(Written by Anne Eckstein)

28 November 2012 - Establishing penalties is a first step towards convincing owners of end-of-life ships not to send them for dismantling to environmentally neglectful sites, but why not give them incentives, such as a financing mechanism to choose sites that meet the highest standards?

This is one of the main changes made by rapporteur Carl Schlyter (Greens-EFA, Sweden) to the draft regulation on ship recycling presented by the European Commission. Schlyter will have the support of Shipbreaking Platform, an NGO that sees such a measure as a way of keeping and developing ship recycling capacity in Europe.

The draft report (1), debated in the European Parliament’s Committee on the Environment (ENVI) on 28 November, will be put to the vote in this committee on 19 February 2013 and at the April 2013 plenary.
The draft regulation (2) sets up rules for the recycling of merchant ships flying the EU flag, the majority of which are dismantled at sites in Asia that do not take steps to promote the safety of workers or protect the environment.

It aims to write into EU law the Hong Kong Convention, concluded in 2009 under the auspices of the International Maritime Organisation (IMO), but which is not expected to enter into force for at least another five years. The regulation will require ships flying the EU flag to abide by certain measures found in this convention, including: the keeping of an inventory of hazardous materials, the obligation to recycle ships in safe and environmentally sound ship recycling facilities and the introduction of general requirements applicable to ships prior to dismantling.

As authorised by the convention, the Commission adds stricter environmental standards to the regulation, such as the definition of requirements to be fulfilled by ship recycling facilities, the drawing up a European list of approved recycling facilities and establishment of a contract between the ship owner and the recycling site.

For the rapporteur, however, an important element is still missing from the draft to deter ship owners from turning to environmentally negligent recycling sites. “The root cause of the problem is the current perverse incentive for ship owners to go to the sites with the lowest standards, as they pay the highest price.”

Schlyter therefore proposes to create a European fund to finance environmentally sound ship recycling. A fee would be paid by all ships using EU ports based on their tonnage. These fees would go to a fund that would give a premium for recycling by facilities that meet the regulation’s criteria, to make them more competitive. The premium would be paid only for the recycling of ships flying an EU flag for at least two years prior to dismantling. This would increase the value of EU ships as listed facilities could offer a higher price to the last ship owner and ensure that last-minute flagging-in is not rewarded.

The rapporteur also proposes to require an inventory of hazardous materials for all ships calling at EU ports (whether or not they are EU-flagged); a ship recycling plan for all EU ships sent for recycling or older than 20 years, which would have to be approved by the competent authorities; more explicit criteria for ship recycling facilities, in particular to exclude beaching; auditing and regular inspection of these facilities; and criminal sanctions for certain violations (application of Directive 2008/99/EC on environmental protection to the new regulation).

A fee would be paid by all ships using EU ports based on their tonnage.

(1) The document is available at

(2) COM(2012)118