Vessel scrapping spree on the cards after EU recycling rule change
Older ships are no longer being categorised as ‘waste’ for the purpose of EU law, ...
Ship scrapping and recycling is a natural and inevitable part of a vessel’s lifecycle, and many people rely on this vital market, both directly and indirectly.
While the sector has historically a negative reputation, the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) is making a significant impact on improving health, safety and sustainability standards at recycling yards around the world.
The HKC is concerned with the systematic prevention and, where practicable, elimination of safety and environmental risks through mandatory requirements for preparatory work and requirements for yard facilities and operations.
However, until the HKC enters into force, sustainable ship recycling is driven by the market dynamics between shipowners and yards.
The impact of cost and return cannot be underestimated and shipowners have the power to incentivise a change in ship recycling by choosing sustainable options.
Currently a shipowner who chooses to follow the highest health, safety and environmental standards must send his ship to a yard that holds a HKC Statement of Compliance from a member of the IACS Classification Society, and ensure contractually with the cash buyer that the ship will be recycled in accordance with the technical standards of the HKC.
They should also consider supervision and/or reporting, to ensure and demonstrate that the recycling has taken place in the appropriate way.
A number of shipowners are choosing this route, and demand for responsible ship recycling now exceeds supply in South-east Asia.
Five yards in Alang have achieved HKC compliance certification, and 20 more facilities are going through the process. As competing yards see growth for services based on good health, safety and environmental practices, it creates a commercial environment where HKC compliance, ISO and OHSAS certification have become a competitive advantage.
GMS has worked independently to develop a “Green Team” to support yards in increasing sustainability, deliver environmental transparency and reporting to owners and support yards in working towards ISO and OHSAS accreditation. It is our aim to turn sustainable ship recycling into the norm, rather than the exception.
But to help achieve this across the world, we need to see continued demand for sustainable recycling maintained and one clear global standard to aim for.
The importance of the arrival of the HKC as a global, enforceable standard in ship recycling cannot be underestimated. Neither can it be undermined by other regulations such as the European Union’s Ship Recycling Regulation, which could serve to stifle the progress being made in South Asia.
The EU legislation shares similarities with the HKC, but crucially, the EC interprets some of its provisions as a ban on beaching, even at yards compliant with the rigorous safety and environmental standards of the HKC.
More than two-thirds of the world’s ship recycling is conducted in South-east Asia using the beaching method, and improving these yards is central to the HKC. Interpretation of the EU regulation as a ban on beaching will just create an unfair and damaging geographic gap between South-east Asia and non-beach ship recycling yards elsewhere with no way to bridge the gap between the two.
It will create a less sustainable market, driving poor conditions on beaches and higher standards elsewhere.
The reality is that it is all a matter of management. It is just as possible to have clean, safe and sustainable recycling on a beach as it is to create an unsafe and polluting environment by recycling alongside a pier.
Recycling plays a vital role in the lifecycle of a ship, and is fundamental to the progression of the industry. Ensuring that this process is in accordance with the standards of the rest of the industry, no matter where in the world it takes place, should be seen as a key priority.
The industry must work together to incentivise green growth, secure ratifications of the HKC and ensure no region is left behind.
Dr Nikos Mikelis is a non-executive director for GMS