Lloyd’s List – European Commission’s ship recycling proposal scrutinised

(Written by Liz McCarthy)

20 June 2012 - Debate in industry about whether further regulation on top of IMO Convention will prompt EU owners to reflag

The European Commission’s proposal for additional ship recycling regulation on top of guidelines set out by the International Maritime Organization’s Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships has come under scrutiny, because it could prompt owners to flag out their vessels to other registers.

The commission’s Soledad Blanco told the audience at Informa’s annual Ship Recycling conference in London that under the proposal, owners of EU-flagged vessels disposing of end-of-life ships outside EU standards would be penalised.

The commission’s proposal suggests the development of a European list of approved recycling facilities that owners use, which fulfil the following requirements; there is access to emergency equipment, hazardous materials are contained and handled on impermeable floors so they do not contaminate the environment, and proper downstream waste management is in place.

The “dissuasive penalties” would be for owners of ships sent to facilities not on the European list but also for the penultimate owner if sold within six months of being sent for recycling.

All EU facilities would be included within the European list and yards outside the EU would be able to apply to be included on the list, which would involve conforming to its ship recycling regulation and accepting the possibility of inspection.

The point on penalising owners prompted a question from UK Ministry of Defence disposal and reserve ships officer Robert Lane about whether the proposed regulation would still allow owners to circumvent rules in the same way.

The NGO Platform on Shipbreaking director Ingvild Jenssen argued that the measures needed to be more stringent as the European-flagged fleet was very young and many owners reflag or sell ships well before they reach end-of-life.

“One of the proposals we make is a requirement not just for an inventory of hazardous materials for the EU-flagged fleet, but all ships coming into EU waters,” Ms Jenssen said.

Europe should use its power as a trading region and remove the incentive to flag out, she argued. Perhaps this reflects Europe utilising power in the same way that emissions control regulation has prompted the industry as a whole to reassess sulphur content in fuel oil.

Ms Blanco, who is the director for the directorate for sustainable resource management at the industry and air department within the commission’s environment directorate general, stressed though that the proposal is just that and is likely to change while under discussion by the European Council and European Parliament.

She added that the European Council is establishing a view and work will start soon in the European Parliament. “EU lawmaking is a slow process,” she said, and despite the proposal being put forward in March, the earliest possible end of the legislative process with adoption of new regulation could be a year or more later.

Entry into force could come another year after that, and another three years after that would be the deadline for establishment of the European list.

The commission’s proposal was published in late March, six years after the EU realised the current Basel convention on waste management was easily circumvented by owners and it needed to work to establish global mandatory requirements.

Ms Blanco said that the commission knew that for large ships, there are no recycling facilities within the Organisation for Economic Cooperation and Development that could dismantle them, which was forcing owners to circumvent existing European regulation.

In 2009 only 10% of European-flagged vessels were recycled at OECD facilities, mainly in Turkey.

Looking at two of the world’s biggest recycling facilities in China – one in Jiang Xiagang and Dalian’s site that is under construction – their capacity of 1m ldt per year each is seven times more than available capacity in the OECD.

It has been estimated that an average 1.6m ldt of capacity would be needed each year up until 2030 to recycle EU-flagged ships, so a solution was needed, Ms Blanco said.

At present the vast majority of tonnage globally is dismantled in China, India, Pakistan and Bangladesh, with the last three often coming under criticism for the beaching method they use, regardless of whether they are seen as green facilities or not.