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Ship recycling

Priority KVNR: The Hong Kong Convention is the way forward

Shipowners:

“The Hong Kong International Convention ensures the safe and environmentally responsible recycling of seagoing ships. Therefore, it must come into effect as soon as possible.”

 

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Contact

 

Niels van de Minkelis
Technical and Nautical Affairs

+31 6 4824 0287
+31 10 2176 282
minkelis@kvnr.nl

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Press inquiries

 

Nathan Habers
Public Relations


+31 10 2176 264
habers@kvnr.nl

Context

Dutch shipowners recycle hardly any ships. If they do, then they recycle them in a way that is responsible for both human welfare and the environment, without transferring the flag state registry (reflagging). This has been confirmed by the annual figures from recent years from the NGO Shipbreaking Platform.

It is positive that ships are recycled and that almost every part of a ship can be reused. However, in some countries, the way in which ships are recycled leaves something to be desired. This is due to concerns about the protection of the safety of workers and the environment. This is why there are international and regional regulations for the recycling of seagoing vessels.

Hong Kong International Convention

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (“Hong Kong Convention”) was adopted in 2009. This sets adequate requirements for ship recycling procedures, applying globally to ship recycling companies and shipowners. However, this convention has not yet been ratified by enough countries to come into effect.

European Ship Recycling Regulation

The European Ship Recycling Regulation came into force in 2013. While it has many similarities with the Hong Kong Convention, it is less effective and does not provide a level playing field on a global scale.

In addition, EU Member State-flagged ships may only be recycled within the EU at ship recycling facilities approved by an EU Member State, or outside the EU at ship recycling facilities approved by the European Commission. These ship recycling yards are included in a list of facilities that have been approved by the EU to recycle EU-flagged seagoing vessels.

European Waste Shipment Regulation

Furthermore, there are hugely significant complications in the application of the European Regulation 1013/2006 on the shipment of waste (WSR) on ships that the owner intends to discard for recycling. In particular, this relates to the definition of the term ‘waste’.

The challenge

  1. For more than 10 years, the international shipowners community, including the KVNR, has been indicating that, instead of regional regulations (such as the EU Ship Recycling Regulation), global regulations are needed to truly and effectively regulate ship recycling processes worldwide. This already exists: since 2009, the IMO’s Hong Kong International Convention for the Safe and Environmentally Friendly Recycling of Ships has been ready to go. Unfortunately, this convention has not yet come into force because some countries, unlike the Netherlands, have not lived up to their word and are delaying their accession of the convention.

  2. In addition, it is of the utmost importance that the European Commission does not exclude those ship recycling facilities that use the ‘beaching’ method, but still comply with the recycling standards, from its approval process. The KVNR is of the opinion that it is not the location or method, but the way in which the ship recycling process is actually carried out that determines whether ship recycling can be carried out in a safe and environmentally friendly manner. The ‘beaching’ method does not necessarily have to be a bad ship recycling method.

State of play - 26 July 2021

On 11 November 2020, an updated list of ship recycling facilities approved by the EU to recycle EU-flagged seagoing vessels was published. This list is effective from 11 August 2021 and is divided into two parts. Part A contains 34 ship recycling facilities located in an EU Member State. Part B contains 10 ship recycling facilities located outside the EU in so-called ‘third countries’: 1 in the United Kingdom, 8 in Turkey and 1 in the United States.

The first of the KVNR’s remarks about the above point is that this concerns theoretical ship recycling capacity. It is also noticeable that there are far fewer opportunities for EU-flagged ships to be recycled outside the EU than in the EU. There are consequently too few EU-approved ship recycling facilities outside the EU to achieve widespread global coverage.

In November 2020, the European Commission observed that the EU Ship Recycling Regulation is not effective because many EU-flagged ships are reflagged to a non-EU flag just before they go for recycling.

According to the KVNR, the limited actual available ship recycling capacity within Europe, combined with the limited possibilities to recycle a ship outside EU borders, could possibly be partly to blame for the current situation. The KVNR – just like other shipowner-representing organisations – pointed out years ago when the regulation was drawn up that regional regulations were not the solution to global problems. The Hong Kong International Convention – not the European Ship Recycling Regulation – is the proper instrument for regulating ship recycling. This is the first reason why the EU Ship Recycling Regulation is ineffective. In addition to the above, it must be stated that the number of EU-approved recycling yards in the EU and in particular outside the EU lacks capacity and geographic spread. The KVNR – just like other shipowner-representing organisations – has expressed concerns about this for several years. EU-flagged ships often sail worldwide and shipowners must be able to recycle their ships in a responsible manner worldwide. Unfortunately, EU-approved ship recycling facilities are primarily located within the EU, with only a few located outside the EU. It is unfortunate that the EU has set strict requirements for EU-flagged ships and ship recycling facilities for recycling, but has not helped the creation of enough possibilities for responsible recycling within and especially outside the EU. With this, the KVNR means:

  1. Sufficient ship recycling capacity. This is not just the total theoretical ship recycling capacity in light displacement tonnes (LDT). This also includes the dimensions of the ships and the ship recycling facilities. For example, not every 300-metre long ship can be recycled at every ship recycling facility.

  2. A decent geographic distribution (worldwide) of EU-approved ship recycling facilities to avoid the situation where a shipowner has to make a world voyage to reach an approved ship recycling facility. In some cases, a ship that needs to be recycled simply cannot sail around the world; reflagging to a non-EU flag is often an obvious, and sometimes the only possible option available.

In November 2020, the European Commission indicated that the current EU Ship Recycling Regulation must be revised and amended:

  1. The European Commission wants to add a financial incentive to the regulation that removes the financial advantage of recycling at a non EU-approved ship recycling facility (‘brown recycling’) instead of recycling at a EU-approved ship recycling facility (‘green recycling’).

  2. The European Commission also wants to broaden the scope of the regulation by adding the concept of “EU beneficiary ownership” to the regulation.

The European Commission proposes that this revision of the regulation should be completed by 2023.

The KVNR believes that:

  1. The EU should not add a financial incentive that would eliminate the financial advantage of recycling at a non-EU ship recycling facility instead of at an EU-approved ship recycling facility.
  2. Instead, the EU should focus on:
    1. A swift ratification of the Hong Kong Convention, it being the only international instrument that can ensure responsible ship recycling worldwide.
    2. Expanding the capacity of EU-approved ship recycling facilities. This involves the sufficient number and size of ship recycling facilities (able to accommodate ships of all sizes) that are geographically distributed around the world.
    3. Improving the way in which ships are recycled, especially in Southeast Asia. This does not mean wiping out of these local industries there by implementing a financial incentive that will prevent shipowners from recycling their ships there. Instead of eliminating ship recycling in Southeast Asia, the EU should help the Southeast Asian recycling facilities make the change from ‘brown recycling’ to ‘green recycling’.
  3. The EU should not extend the scope of the EU flag in the regulation to ‘EU beneficiary ownership’.