News / Shipowners reject bid to force EU ship-scrapping rules on the global fleet

© Joe Myerscough

The introduction of ship recycling licences for all vessels calling at EU ports has been rejected by the trade association representing some 80% of the world’s merchant fleet.

The proposal was aired in the conclusion of a study undertaken on behalf of the European Commission and would compel all ships calling at EU ports, regardless of flag, to purchase a recycling licence.

There are concerns that shipowners are re-flagging vessels to a non-EU “flag of convenience” and are thus not subject to EU rules on ship breaking.

However, the London-headquartered International Chamber of Shipping (ICS) said such a licence scheme would undermine the efforts of the International Maritime Organisation (IMO) to improve the working and environmental conditions at the world’s busiest scrapping yards.

And it added that the introduction of a licence fee – returned at the end of the vessel’s working life, on condition the ship was scrapped at an EC-approved yard – could be seen as anti-competitive.

“Such a draconian unilateral measure, especially if applied to non-EU ships, is likely to be seen by EU trading partners as anti-competitive interference into the conduct of international shipping,” said ICS secretary general Peter Hinchliffe.

“There is a real danger that other nations would apply retaliatory measures,” he warned.

The EC study, led by Dutch research and consultancy firm Ecorys, was tasked with creating a financial incentive to underpin the EU Ship Recycling Regulation (SRR) that entered into force on 30 December 2013. This requires owners of vessels sailing under an EU flag to use only EU-approved ship yards to scrap their vessels.

The world’s largest container operator, Maersk Line, has been in a spat with environmental groups over a threat to use flags of convenience to bypass the EU regulations and said it would continue to earmark its ships for recycling on the Indian beaches of Alang.

Maersk maintains that recycling a ship at EU-approved yards – currently just a small number of yards in China and Turkey – can cost $1m-$2m more per vessel.

The company told The Loadstar last month that some scrapping yards in Alang “had raised standards” with four facilities now certified to the 2009-adopted IMO Hong Kong Convention.

“Maersk Group has had a responsible ship recycling policy since 2009,” said Annette Stube, head of group sustainability. “Developments in recent years in Alang have seen a number of certified yards capable of recycling to our standards. In our view, it is essential to support this development – and we do that most effectively by bringing our ships to be recycled responsibly in Alang.”

Meanwhile, the European Community Shipowners’ Association (ECSA), has argued that the EU would be better off concentrating its efforts on getting EU member states to ratify the Hong Kong Convention, and to recognise the efforts being made by recycling yards in Asia to gain certification in accordance with IMO standards.

“As well as being unduly complex, widely impractical and very difficult for the EU to administer, the establishment of such a [reclaimable licence fee] fund will be an affront to the international community which has adopted the Hong Kong Convention on ship recycling,” said ECSA secretary general Patrick Verhoeven.

The study report, published by the EC last week, does not recommend the implementation of a ship recycling licence system until 31 December 2020, “allowing time for the legislative process and for the shipping industry to adapt”.